How to make managing pensions as easy as logging into an app
Technology can make pensions part of ‘everyday employee experience’. That doesn’t mean expecting people to look at their pensions every day, that would be unrealistic, but making accessing and managing pensions – when they do – feel like an everyday experience.
For many people, their smartphone is the gateway to most, if not all, of their finances. Banking transactions, submitting gas and electricity readings, checking savings and investments, buying train tickets, shopping and buying foreign currency. It’s all so much easier than five or 10 years ago, mostly instantaneous and nothing leads to reams and reams of follow-up paperwork.
Sometimes people log in to apps of their own volition and other times when they are nudged, for instance when it’s time to submit utility readings or when money has arrived in their accounts. None of it feels like drudgery and they get the sense of being in control. And that’s important.
Dr Alex George was a guest speaker at Cusion’s recent Workplace Savings Summit and perhaps one of the most important points he made was that financial challenges are not in themselves the cause of stress and anxiety but rather the fact that people feel they’ve lost control.
Feeling in control
This is the scenario: an unexpected bill comes in, but you know you have enough money saved and all you need to do is log in to your online banking app and transfer the money into your current account to cover the cost. In seconds it’s all sorted.
An alternative scenario might be that you think you have enough money saved but you’ve lost your online banking login details, so you need to phone the bank to find out how much you have in savings. The lines are busy and it takes over an hour to get through, only to be told that your savings are in a 60-day notice account, but the bill is due in 10 days’ time. Your stress levels are now through the roof.
While perhaps exaggerated, it’s the second scenario that often prevails in pensions and this is a big reason why engagement levels with pensions are so low. Things are too difficult to do – whether you want to change contributions, switch investments or transfer in other pension pots it can sometimes feel like wading through treacle. And if it feels too hard to do, you eventually just don’t bother.
Transfers can take months
For instance, a lot of people want all their pensions in one place and so decide to consolidate them. Their current active scheme can be accessed and managed through the mobile app. So even if they leave their current employment, they will still feel in control of their financial future. Sounds easy enough?
Well, not really. Trying to transfer a couple of pension pots from other pension providers can take months. Everything to do with transfers is paper based even though there’s web access, and it can be impossible to speak to anyone to get things moving. Many people might just give up.
If we want people to engage with their pensions, which is key to ensuring good retirements, there needs to be a fundamental shift in the industry. It needs to embrace technology more so that people can manage their long-term financial future in the same way that they manage almost everything else in their lives – through a mobile app.
Technology gives a sense of control and makes dealing with pensions feel like an everyday experience – not something to be dreaded. Let’s get rid of blanket paper communications (which is better for the environment) and all the friction points including jargon, and give people control of their financial futures.
In partnership with Cushon
Cushon is an online savings&investments platform provider, offering holistic workplace savings.