Swap ‘utility’, ‘broadband’, ‘bank’ or ‘gym’ for ‘pension’ and it would barely raise an eyebrow. Should pensions be different to the rest of the free market?

— Will Aitken (@WillJAitken) November 12, 2021

Our pension savings have a status in many people’s eyes which makes them different from utilities , bank accounts and gym memberships. But there is no obvious reason for this. They are in practice, commoditized sums of money that can be bid for.

Indeed , the elevation of pension savings to some kind of “special status” means we do not have open pensions as we have open banking , nor a U-switch  service, nor a pensions supermarket. We are running years late in the delivery of a pension dashboard because we are terrified that our pension savings are too complex to compare and switch with any common means of comparison.

Putting all pensions in the “too hard to transfer” box, means a proliferation of small pots, many of them lost to their owners. It means disillusionment among savers who end up finding pensions just too hard, it means people reaching retirement without a pension or even a pension plan.

It feels so good…

Rather than persist with negative messaging about scamming , Pension Bee are appealing to people’s positive emotions

other consolidators are available

The key messages are in simple words and phrases that talk of confidence, feeling good and swapping old pensions for a new pension account (with Pension Bee).

It feels so bad….

Yes it does feel so bad to be scammed but what does this advert tell us?  It tells us that we are prey to those who would make a nuisance of themselves and threaten our savings. It suggests that being scam smart is in resisting temptation.

Talk about mixed messaging!

Is it any wonder that people are confused about what to do with their pensions, is it surprising that the pensions dashboard is struggling to get pension schemes and their administrators to engage with , let alone sign up to their responsibilities to share data?

Pension Bee, who currently offer new account holders £25 to get started are not incentivizing transfers through irresponsible advertising. Instead they offer those looking to move their money the services of their BeeKeepers to fill the pension account with money from “old pensions”.

Having combined my various pots into one bit pot, I can confirm that this does indeed “feel good”, though the combination process was neither short or easy. I suspect that it would have been easier if I had had the help of Pension Bee. Had I not been extremely “pension confident”, I would have given up and still have had many small pots. I would have had pots not a plan.

Gimmicks or guidance

All pension providers have marketing budgets which form part of the “cost of sale”. Those budgets can be spent marketing to intermediaries or spent marketing direct to the consumer. Marketing to the intermediary , while more tightly regulated than it was, is still considered a relatively safe activity while direct marketing to consumers, especially where financial incentives are involved, falls into the area of “financial promotions” that are most heavily scrutinized by the FCA and other regulators.

It is right that financial promotions whether adverts , or  meerkats or cashback , are properly regulated both by the financial and advertising authorities. Perhaps the most notorious financial incentive of the past five years was the “sausage and chips supper” offered to steelworkers in exchange for their time listening to lead generators selling freedom from the BSPS pension.

But these scandalous suppers were given by unauthorized individuals who circumvented the rules by operating outside the FCA’s “regulatory perimeter”.  Like the lad on the jetski, they need to be kept away, which is why the FCA’s advert and Pension Bee’s are congruent and not conflicted.

Pension Bee’s claims that they can make you pension confident and that combining old pensions online can be born out by its high trust pilot scores and its successful business.

By restoring confidence as they do, Pension Bee are enabling people to have a pension plan which makes them feel good.

Surely this is a better way of approaching pensions than cowering in the wake of the scammers jet ski?

Despite all the headwinds in their  faces, Pension Bee and other direct to consumer consolidators are doing what the Government’ small pots initiative is talking of doing, what the dashboard will help do eventually, what the pension consolidation agenda is all about.

If it takes a few gimmicks to get engagement, so be it .

Whether its a meerkat or a Beekeeper, if it gets the job done well it is not a gimmick. If it feels good to combine pots then let’s combine pots, making sure that the people doing this are properly regulated to do so.

And if we know that the Regulators are out there , hunting down the scammers on their jet skis or whatever, then regulation can say it is helping us be pension confident – helping us feel so good about our pensions.

It is right to ask the question that Jo Cumbo asks, but it is proper to push back. We need ways to combine our pots and , while some pots are  fragile and precious, for the most part, pension pots are just commodities like utilities. bank and gym accounts.

Incentives don’t need to be gimmicks, they can be part of the nudge which gets us planning. Planning is the process that leads ordinary people to proper pensions.