Savers are more likely to seek guidance and advice after receiving a ‘stronger nudge’ from their provider, according to behavioural trials conducted on behalf of the Money and Pensions Service (Maps).
The research, conducted by the Behavioural Insights Team, tested two distinct routes to take when customers asked to access their workplace savings; offering to make them a Pension Wise appointment or transferring them to a member of the Pension Wise booking team who could explain the offer and make an appointment.
The research, conducted with the support of Aviva, Hargreaves Lansdown and Legal & General Investment Management (LGIM), found these methods improved the number of savers who booked and attended a Pension Wise appointment to 11 per cent, from less than 3 per cent of customers in a control group.
There was no evidence of a significant difference between the two different ‘stronger nudge’ methods.
However, appointment attendance rates were lower among the groups who had received the nudge, with 76.7 per cent of appointments attended by the directly referred group and 80.9 per cent attended by the group who had appointments made for them.
This compared to an attendance rate of 89.5 per cent among the control group.
Minister for Pensions and Financial Inclusion, Guy Opperman, said: “We are committed to ensuring that people preparing for retirement have access to the necessary support and information to make informed choices about their financial futures.”
Behavioural Insights Team head of behaviour, Pantelis Solomon, added: “These findings provide further evidence that simple, low-cost policies which go with the grain of human behaviour can help to improve people’s decision making.
“We hope that more interventions which apply behavioural insights will be tested to increase the take-up of guidance even further and ensure that people are getting the help they need at retirement.”
Association of British Insurers assistant director, Rob Yuille, said: “These trials show that stronger prompts to guidance can work for some customers, but additional measures are needed, including more support earlier in life, more accessible advice, and a shift in the regulatory boundary so that Maps and providers can offer more support to customers making retirement decisions.”
Further analysis into whether results were affected by factors such as a customer’s age, gender or retirement pot size was unable to identify any evidence of these characteristics having a material impact.
Maps head of pension policy and strategy, Carolyn Jones, commented that to best support financial wellbeing in later life it was key to “develop a greater understanding” of the groups of people accessing retirement savings without guidance or advice, as well as to work out “whether they face significant detriment as a result”.
— to www.pensionsage.com