FCA says firms must improve pensions engagement

The FCA has called on advisers and providers to think beyond email messages to boost pension engagement with consumers. New research from the regulator out this week has highlighted that emails alone are not enough to get savers to engage with their pensions. The regulator tested how different subject lines and email messages could influence people’s engagement with their pensions. The results showed that some behavioural messaging could help encourage consumers to open an email, but it did not affect their engagement with the email, such as whether they clicked on a call-to-action button. The research undertaken by the FCA also tested whether sending an email around notable touch-points, such as a birthday, could increase engagement. Older customers were more likely to engage overall, but no key life point was particularly effective at increasing engagement overall. A field trial was also conducted with over 82,000 pension customers from two providers to test if sending emails at notable touch-points would encourage people to open and click through to free financial guidance. Overall engagement with the emails was low, with just 1% to 7% of customers clicking through to seek free financial guidance. This was despite 42% to 55% opening the emails. The touch-points tested in the field trial were milestone birthdays, starting a new pension, two years before retirement, logging into a pension account, an increase in contributions, a new year and anniversary of holding the pension. The most likely consumers to engage with emails were those who had recently logged into their online pension account, who were 6% more likely to open the email and 3.5% more likely to click on email links. The research also showed the importance of pre-testing communications to ensure they do not unintentionally discourage consumers, with several participants in the experiments feeling like they had lost trust in an email which looked like a marketing push. Following the research the FCA has called on firms to, “explore innovative approaches in talking to consumers about their pensions.” The FCA ran three experiments as randomised controlled trials, which tested variations of draft emails and subject lines with different panels of UK residents. These online experiments were then used to inform the design of a field trial with 82,000 pension customers from a workplace pension provider and a master trust scheme. The fieldwork was conducted between 5 October 2023 and January 2024.

FCA says firms must improve pensions engagement

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