Pension under-saving is a ticking timebomb that must be defused - Anna Harrigan

The current analysis from the government, however, shows there is a large proportion of the population under-saving for retirement, threatening to negatively impact their standard of living in later life. This pattern affects earners of all levels, indicating that action is needed from all industry stakeholders to adjust the balance. As the cost-of-living crisis continues, there is a real risk that savers will be looking to cut more corners on long-term commitments like pensions.

What can be done by businesses to alleviate this sobering outlook?

Business leaders across the pensions industry should consider how they interact and support their customer base to better prepare for retirement through:

Increasing pension engagment

For many people, a pension will be one of the largest assets that they will ever invest in, often second only to their home. However, few working people have sight of this since retirement age can feel a long way off. In addition to that, it is estimated that up to £27 billion worth of pensions are currently lost due to multiple pensions being created during a lifetime. Latest research shows that on average, people can have up to twelve jobs during their career. By offering relevant and personal content to educate savers, as well as engaging experiences like coaching and client directed voting (voting on an expression of wish for the fund manager to vote at AGMs) – workplace and direct providers can build relevance and engagement with their customers, ensuring they see the value today and into the future.

Connecting with the growing pensions ecosystem

The government is continuing with attempts to modernise the pensions industry to make it easier for today’s population to have real visibility and understanding of their pension. Initiatives like the Pensions Dashboard Programme and proposed changes to auto-enrolment will only deliver customer benefits if product providers collaborate with ecosystem partners to go beyond looking at pensions in isolation. By creating a joined-up experience, it will give customers full control over their savings.

Expanding your offering to become “Life-centric”

We know that ensuring customers are engaged with their pension is a vital step to giving savers the confidence they need to work towards financial freedom, but for many savers, decisions on what to do next – and in the long term – remain daunting. Expanding pension propositions to play a truly meaningful role in the lives of your customers is what we call “Life-centricity”. The next generation of market leaders will go beyond just offering the best features and products, by better understanding the human behind the policyholder. Through harnessing data and analytics to gain a better understanding of savers and what factors drive their decision making, the leaders of tomorrow will play a more active role in the prosperity of savers.

Anna Harrigan, Managing Director, Accenture Financial Services