Industry must do more to educate savers – Altmann

The industry must do more to educate savers on the benefits of pension engagement while simplifying and invigorating its language, according to former Pensions Minister Ros Altmann.

Speaking at the Transparency Taskforce’s (TTF) London symposium, Altmann said that the industry “is still acting as if we don’t really want to worry whether people are engaging or not”, despite auto-enrolment creating millions of new savers.

“I think it would be really important to attach education, information and an approach that encourages engagement, as a core part of any pension product,” she added.

“We’re still in this mindset that pension products are something that people buy, you don’t sell it to them. They are a kind of forced buyer now.”

To encourage education and engagement, Altmann recommended using both simplified and more appealing language that would help pension products seem more approachable.

She continued: “We talk in a different language from ordinary people, that we hope are going to be enjoying the benefits of these pensions.

“Almost all workers who are going into this, what is it that we expect them to put their money into and be proud of? We call it a default fund.

“Why not ‘expert’s choice’, or ‘specially designed for you’, or some other catchy title.”

It was also highlighted that pension customers often don’t know that their pension savings don’t just sit there, waiting for them to retire, and if they were aware what they could do with those savings whilst still working, their engagement and understanding could improve.

Altmann concluded: “Address the issue of education and engagement to make people feel proud of the fact that they have a pension or another financial product.

“You could do that by talking about their money working for them while they’re waiting to receive it later. So, it’s doing good for the climate, for the planet, the local economy, for infrastructure, for social housing, whatever.”

It was also announced at the event that Altmann had become the one hundredth ambassador for the TTF.

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