Only a 1/4 of DB members feel very confident about making decisions at retirement
06 Apr 2021
Only a quarter (27 per cent) of DB pension members feel very confident about making retirement decisions while over a third of DB members don’t feel knowledgeable about their DB pension, according to a new survey by Hymans Robertson in association with like minds*. The combination of lack of knowledge and confidence, with the challenging financial circumstances due to Covid-19, are putting an increasing number of members at risk of falling foul to intensified scamming warns the leading pensions and financial services consultancy.
With nearly half of the respondents (47%) also saying they’d welcome more support on what options are available to them and only a fifth (21%) believing that they already have an adequate level of support around what options would be most suitable for them, the findings are an important reminder for trustees and employers. They need to review what they currently provide to engage and support their members, and crucially to establish if they need to do more to help them.
Commenting on why a review of how schemes engage and support their members should be undertaken now, Ryan Markham, Head of Member Options at Hymans Robertson, argues that trustees and employers need to step up at this crucial time:
“Over the last 12 months we have seen a vast increase in financial fraud with scammers taking advantage of people being isolated at home with a much-increased reliance on technology. With many DB members struggling to get the information and support they need to really understand their options this has been a prime breeding ground for unscrupulous conmen.
“The combination of large sums of money, and in some cases a lack of technological understanding, has increased the susceptibility of many in DB pensions. The Pension Regulator has, quite rightly, pledged to combat scams and is encouraging trustees and sponsors to do more to help protect members. It is vital that trustees and employers consider their member engagement and support strategy. They have a moral responsibility to step up and ensure that their engagement strategy is fit for purpose having actually thought through what members really need to make well informed and life changing decisions.
“Without this there is a real risk that member outcomes suffer needlessly in the hands of ever more sophisticated financial scammers or through members making inappropriate short-term financial decisions. This could be storing up risk and challenge for trustees and employers as members later seek to blame someone for these poor outcomes.”
Commenting on the importance of member communications, Nick Throp, Director at like minds says:
“The truth is that a lot of DB communication has been driven by a requirement to communicate rather than being truly member-centric and understanding what members need. Many DB pension schemes are still stuck in the digital dark ages. Covid-19 has highlighted this DB digital deficit even more. Proactively helping members understand what they have, its value and embedding support and guidance into the engagement process will protect members better.”
*About like minds
Like minds are employee engagement specialists who have built their reputation on combining clear, simple messages with creative designs. Their core expertise is in pensions, employee benefits, reward and HR communication.