Transparency is about letting people see the information they want to see, not the information you want them to see. This important distinction is missed by many of the people I talk to as part of my work at AgeWage. So it’s really heartening when along come a couple of young men publishing on behalf of a pension administrator, a report that actually tells us not just that the pension industry isn’t trusted, but why! The report says that 70% of people it surveyed simply didn’t trust the information they were getting from those they paid to provide it – AKA- us lot!
You can read the report via this link, the report is called 2020 TRUST &
CONFIDENCE INDEX , the two young men are Daniel Taylor and Joe Anderson. They are employed by Trafalgar House which is now a pensions administrator.
Trust and Confidence
This is the bold conclusion made by Daniel and Joe.
Fundamentally, trust in the pensions industry needs to improve.
There are no two ways about it, the scores achieved by the
industry both for trust and confidence are lower than we
should be willing to accept – TC Index
This conclusion is based on this stark result
That pensions are generally not trusted by the general public is the fact of this survey. The question is “why not?” and the answer appears to be that people are more confident in their own ability to manage their retirement than in the advice of others.
So why the lack of trust?
The middle section of the report (with research conducted by YouGov) dives into why people aren’t trusting of pensions.
The two reasons people cite are that pensions get a negative press and the lack of transparent information.
It’s not us – it’s you!
People’s personal experience (and that of friends and family) is not the issue, it’s the low confidence people get from the information they receive and from the comments of those they read , watch and listen to.
If you just left it to me…
The final part of the research asks a very interesting question. “What do you want.?” The answer is not to be told what to do but to have the information needed to trust pensions and be confident in them
People value information and access to information over being told what to do. And they are not frustrated by their own lack of judgment or skill
When it comes to members’ feelings of their own responsibility
for the size of their savings, almost exactly half – both pre
and post Covid – are confident that they have made the right
These results seem to suggest people don’t feel
they are to blame for any lack of money, understanding or trust
towards their pensions.
Perhaps even more surprisingly for an industry where the
assumption is that many people will just go into the default
funds or just accept whatever investments the scheme puts in
place, more than half of those surveyed (55.3%) were confident
in the investment choices they had made.
Confidence in the level of charges is also high, considering the
media activity on this thorny topic and general public negativity
on the wider subject of fees. 44.8% are confident in their
choices regarding charges on their pensions.
Finally, there is quite strong confidence from members’ of
where their money is held, with 56.1% of respondents confident
they made the right decisions.
A reverse of accepted wisdom on pensions
The findings in this report may seem radical to those in pensions (especially those who work as advisers) but they are in line with popular sentiment about much else!
We are expected to be able to manage our own affairs with regards our health, our state benefits, our job and we are expected to take responsibility for those around us who are in our charge. We expect to be able to get the information to take life changing decisions and by and large we now rely on the internet for access to that information digitally. Fast, accurate and clear information from a self-service website adds up to “high quality service” and these requirements easily outweigh the value of frequent communications and face to face contact. The message is “give us the information and let us get on with it!”.
Trust and confidence in our customers
The most important decision taken in UK pensions in the 21st century was to give people the choice on how they spent their money. Osborne told the electorate that they were grown ups who could make their own decisions and they loved him for it. Freedom and Choice in pensions remains a popular policy – not least because people don’t have trust and confidence in the pension industry to give them it!
Our failure to give people a simple dashboard that tells them where their money is, how much they’ve got and when and how they get their hands on it, is an example of the pensions industry destroying trust in itself – with the public it serves.
Likewise our failure to simply explain how much our customers are paying for our services and our inability to agree and present a common framework for value for money marks us out as not just incompetent, but as untrustworthy.
Thanks to these two young lads, Daniel and Joe, for getting this report out and for telling it like it is. There is a great deal of common sense in what is said and I hope that it is read by the people in the Pension Dashboard Program and wider.