The FCA’s Pension selected items is proving a means to connect to the people beyond our pension expert world.

Here the FCA is  testing people about their capacity to meet what the financial services industry considers “engagement”.

• what’s in the pension pot at the moment
• has the saver checked the pot’s value in the past 12 months
• have they got an idea of what they and their employer are paying into the pot
• haven’t made a change contributions in the last 3 years
• was the saver aware that could he/she have?
• never given contributions much thought
• aware that the pot is “invested”
• aware that fees are being charged
• reviewed whether the pension provider is any good

I fear I may have used colloquial language but I do so in sympathy with most savers who cannot be bothered with – sorry “engaged with” these questions. The answers to each of these questions by way of being bothered shows that most pension presentations are totally missing what people want to know, how much pension they are going to get (and yes I mean pension and not pot value).

The 24% is concentrated on people who have a lot of money, able to get at their money and self selecting savers who are self-employed, if you look beyond these groups, engagement is very low indeed.

We have to remember that most ordinary savers have no interest about charges, investment , product providers or much else and we should not blame them, I do not feel guilty about not knowing how engines work, I just expect it will provided I feed the fuel.

The “higher results ” for the financially illiterate” suggests achievement but I don’t suppose it is, but postgrad/degree qualifications don’t make for engagement, 20% of such people don’t know what they’re pot’s worth.

The value of the pot is proving valuable to people now it is generally available online and this is a good omen for the pension dashboard but the question does not ask about what the dashboard will deliver (a SMPI created pension from the pot). If the defined pension pot is delivered as a cash amount it is doing lot to help people understand its “pension” value.

This is good news and digital access to the pension pot is good news. But it is the only bit of information that gets above 23%.  Moving from pot valuation to pension dashboard pension estimates is going to be a big challenge for people with limited capacity to think things through.

If we are to put effort into engagement , I would suggest that it is put into explaining how much pensions cost when paid from a pot – but this will require development of decumulation defaults.

That people know how much is being paid into their pension is good news – if true. Are employers paying a percentage of salary or a band of earnings? I hope that employer contributions become a measure of employer worth. We have to forsake any chance of members understanding the employer’s contribution into DB (I don’t) but a CDC scheme will be comparable with a DC scheme – on the contribution scale.

It has been explored elsewhere in the report, how important the DC savings pension is to a future lifetime income. The answer is “important” but not the unique determinator, for poorer people the state pension is more important and there are a wide variety of income sources for those in retirement, with the pension saving being more about “cash” than “income”.

This measure seems odd. Are a quarter of people saving, increasing contributions at all? I am pleased to hear that this is happening. It may be as a means to increase mandatory AE contributions though I suspect that it will more likely give Government encouragement that people will do it for themselves.

I “can’t be bothered” with large parts of the “engagement” section of the Pension Section of the Financial Lives 2024 survey.  I do not think that getting engagement on most of the bullets above is a high priority. But I think it is important to differentiate the information which is important and make sure it ties in with the coming pension dashboard.

It would be good to see questions next year on death benefits. This link goes to the kind of engagement that matters