Two-fifths (40 per cent) of Baby Boomers aged 58 and over with defined contribution (DC) pensions do not remember receiving a wake up pack, while a further 30 per cent believe they never received a wake-up pack, according to research from Dunstan Thomas.

The survey also found that, of the 30 per cent that do remember receiving it, the average age of receipt was 60.5 years.

This is despite regulatory changes introduced in November 2019 that required wake-up packs to be delivered when prospective retirees turned 50, then every five years until they have fully crystallised their pensions, meaning that every pension-holding Baby Boomer should have received at least one pack by now.

The research suggested that Investment Pathways communications were also not as engaging as hoped, as only 15 per cent of retired and non-advised respondents remembered being offered Investment Pathways decumulation options over the past year.

In addition to this, nearly two-thirds (62 per cent) of this group confirmed hey had not been offered the Investment Pathways since they went live.

Dunstan Thomas acknowledged that, at the time of the survey, Investment Pathways had barely been running a year, stating that it did not come as a surprise that 83 per cent of the sample claimed to not have even been presented with the four pathways.

However, in light of the findings, Dunstan Thomas suggested that it makes sense to explore digital delivery of these packs via a web portal or mobile app, explaining that this might make it more likely for customers to engage with their pension savings earlier.

Indeed, Dunstan Thomas director of retirement strategy, Adrian Boulding, also highlighted the findings as demonstration that a lack of engagement before and at-retirement is "still a massive issue".

He continued: "Providers need to work harder to craft high quality, more interactive, timely, personalised and engaging communications, delivering this across policyholders’ preferred digital channel not just in paper form, if they are going to help their customers to optimise their retirement incomes and better decumulation choices.

“Too many are still cashing out at retirement and leaving the money in near-zero interest bank accounts and failing to de-risk their portfolios ahead of decumulation, for example.

“The new pension freedom choices available to Boomers moving into retirement in large numbers each year, puts a much greater onus on provider communications, particularly for the three-quarters of them not likely to access regular financial advice at this crucial stage.

“We’ve uncovered evidence of over-drawing down, late de-risking of portfolios, and many Boomers not being able to determine the retirement income they are likely to be able to afford going into retirement.

"DC holders think they will only be able to derive an average of just 37 per cent of their overall retirement income from their pensions. We need to do better than this to help consumers achieve better outcomes.

“Technology offers the scope for providers to deliver a very different form of communication than that historically envisaged by regulators.

"On screen notifications can be much shorter but more frequent, enticing members to delve into the links on a journey of discovery at a time that suits them. The demand for information alerts via smart phone was a particularly encouraging sign of the shape of things to come.”

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