It is rare that the topic of pensions makes the front page or even mainstream news as often as they have in the past month, but a combination of the mini-budget, fluctuating markets, the sector’s use of liability-driven investment (LDI) strategies, and a focus on the pensions triple lock, has seen pensions at the heart of the national debate in recent weeks.

There has long been a concern that people remain nervous when it comes to talking and learning about their pensions.

Last year research showed that only 57 per cent of people know that they would not lose their private defined benefit (DB) pension entirely if their employer failed, and a fifth (22 per cent) of pension scheme members surveyed admitted that they never talk about their pensions with their family or friends.

Likely, the recent media spotlight on pensions has only exacerbated the confusion and concerns further.

Talk Money Week is aimed at encouraging people to talk about money – still seen as a taboo subject by many. We want to do our bit to encourage people to understand better their pension position and the protections and safeguards in place.

Money worries are stressful and with the current uncertainty mental health organisations are reporting an increase in money stress. Financial well-being is key to peace of mind and those of us working in pensions can all play a small part in reassuring pension scheme members.

It’s easy to focus on the short-term issues at the expense of longer-term financial security. We want to be sure that DB members know the protections available to them, understand their pension and are encouraged to talk about it and seek advice.

Communication is key

All of us in the sector have different touchpoints with DB scheme members. Be it as a trustee, a consultant, regulator or an adviser, and we can all play a part in helping inform scheme members amidst the headlines. And the good news is that together we can allay so many of the concerns and confusion that people have about their pensions.

The recent research also showed that fewer than half (40 per cent) of people aged 55 and over have had an open discussion with their family about retirement planning and pension provision.

We also know from the research, that DB scheme members would welcome more correspondence from their scheme about their pension. Sharing accurate information, communicating regularly and fostering more open conversations about pensions are all areas of focus within our industry but clearly there is more to do.

Protection is in place

The Pension Protection Fund (PPF) provides pension protection for members of private sector DB schemes across the UK in the event of employer insolvency.

The protection we provide is individual- so regardless of an employee moving to another job, their DB pension is always protected. PPF protection for many scheme members is almost an invisible added employee benefit. We already know that the majority of DB scheme members don’t realise that their pension is protected or that their scheme sponsor pays an annual levy to contribute to this valuable protection.

Of course, there are other tools and tips that we can share to help make sure DB scheme members pensions are protected. For example, we know that once a member’s link with a former employer is lost, it can be hard to keep in touch with them and hard for the individual to then track down their pensions.

However, this can be tackled with better communication to scheme members, reminders to update contact details and even tracing services.

Similarly, last years’ research showed that at least a quarter of DB scheme members are not clear on what would happen if they passed away before their partner or dependent, and who would be eligible to receive their pension as a beneficiary.

We can encourage members keep their beneficiary details up to date so that their scheme can easily get in touch if needed, easing pressure and burden during a challenging time.

It may not always be an easy conversation, but all of us know how important it is to talk money, particularly when the headlines may be causing many concerns.

By talking with our members clearly, we can also help to confidently reassure and help give them the support they need and point them to sources of information and advice and as the saying goes “it’s good to talk”!

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