Blog: Talk Money Week 2020

Brits are not the best known for talking about money, no we prefer to concentrate on the important things, like the weather.

But for a society so well known for hating financial discussions, there are certainly a lot of ‘insider’ terms for it. Quid, dosh, fiver or a Lady Godiva, dough, bangers and mash – you would be forgiven for thinking that I was discussing my weekly dinners, rather than popular monetary slang (it could even give pensions jargon a run for its money).

However, whilst people may usually be reluctant to talk money, recent events have forced many to open up and face touch conversations simply because they have to - if anything, there seems to be no escaping talking about money at the moment.

The prompt for these discussions may be far from the ideal, but it doesn’t mean that it’s not still an opportunity to be taken advantage of nonetheless. We're all the same boat, and so no one should feel any embarrassment or shame to discuss their finances - no matter what shape they are in.

Indeed, many who were reluctant to speak about money concerns have been greeted with a huge amount of support, with local cafes across the country offering free children’s lunches, for instance.

Campaigns such as the Talk Money Week, run by the Money and Pensions Service every November, also work to encourage greater discussion of money, ensuring that people have the right support in place to get a better grasp on their finances.

Pensions are one area that campaigns such as this may prompt savers to realise they need to ‘up their game’ in order to secure the retirement they dream of, with understanding of pensions also continuing to drag.

Recent research from Nest Insight for instance, revealed that many savers are unaware that their pension is invested at all, with three in five stating that they are confused by pensions.

But encouraging greater understanding through campaigns like Talk Money week could help individuals to better understand the control and power they wield through their finances.

This can in turn prompt member action, such as for savers who many not have realised that their pension was invested in fossil fuels, and want to switch to a more ethical fund.

Initiatives such as Make My Money Matter are already working to use this engagement to combat climate change through the £3 trillion of funds available in pension schemes.

And it could even be a win/win, with Nest Insight’s research also showing that discussing the positive impact of pensions can encourage greater engagement and trust in pensions.

Of course, whilst these campaigns and initiatives may typically focus on the positives, such as the divesting from tobacco or fossil fuels, the current environment means that tough conversations will also be needed.

However, that doesn’t mean that the industry should shy away from talking to customers though, if anything, it means that it has never been needed more.

After all, savers can somewhat get away with not really understanding what happens to their pension contributions in some circumstances, but as the pandemic hit many will have seen their savings hit amid market volatility.

The pensions industry was quick to react, with a number of schemes issuing reassuring messaging to members and regulators circulating warnings about pension scams.

Despite this though, the number of savers opting to cut or reduce their pension contributions amid the pandemic has led to concerns within the industry.

Experts are quick to emphasise that if members, especially younger ones, stop or cut contributions they will miss out on potential boosts following the economic recovery, as well as the impact of compound interest.

But whether members understand this is a different question, and actually talking to members about these issues is crucial for them to truly understand the impact of their decisions.

Many are facing hard times, and will have no other choice but to cut contributions in order to make meet their day-to-day costs. But talking to members, in the context of their larger financial wellbeing as campaigns such as Talk Money encourage, could allow them to at least understand the potential consequences. They may still make what some perceive as mistakes, but they should at least be well informed ones.

It may not always be a happy conversation, but it's important to talk money, even if it's just to let others know that they aren't alone in this.

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