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AXA has launched
its Save More Tomorrow service on its Group Personal Pensions
and Group Stakeholder products, aimed at increasing a member’s
contribution by an agreed percentage at set time periods.
The service has been available to pension funds since January 2008,
and is a step in addressing the issue of participation versus engagement
in group pension schemes.
Research behind the service shows that 68 per cent of pension plan
members think the amount they are saving is too low, although only
14 per cent of those who plan to save actually do. On agreeing to
add the Save More Tomorrow service to their scheme, a proposition
is agreed from the outset and automatically increases a member’s
contribution without any further action or decision making required.
Mark Rowlands, head of corporate partnerships at AXA Corporate Benefits,
said: “We have carried out extensive research around behavioural
finance and were not surprised to find a lack of action and high
levels of inertia when it came to planning and investing into a
pension.
“There are a number of ways we as an industry can improve
contribution levels within group pension schemes and they centre
round a combination of scheme design coupled with engaging and communicating
with the scheme members.”
Rowlands told Pensions Age that since the launch there
have been only single digit opt-outs from the auto-enrolment onto
the Save More Tomorrow service, which is available across
all their products.
“If you give people a choice about 20 per cent will opt in
to it – the other 80 per cent do not want to pre-commit,”
he said. He explained that the lessons learned from the research
into the psychological mindset that could affect this type of decision
shows people as being full of good intentions following financial
education and advice, but few actually followed through. “This
is like a nudge in the right direction,” he added.
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Pensions Age July 2008
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