Lots of savers around the world don’t engage with their pension. This is particularly noticeable amongst those who have been automatically enrolled. The approach’s use of inertia means that these savers tend to have lower levels of awareness and engagement compared to those who made an active decision to start saving in a scheme.
Engagement and the use of default pathways both play an important role in helping people save for retirement. Default pathways work well for many savers, but some could benefit from becoming engaged and taking action in certain situations. For example, if a saver isn’t on track to build up a large enough pension pot, being engaged and aware of this means they can act before it’s too late.
Researchers have become focused on the challenge of how to engage savers, and in recent years a lot of progress has been made. One approach is to time pension communications more effectively so the message reaches the saver during important life events when they’re believed to be more receptive.
NEST Insight, along with Maastricht University and Netspar, recently conducted a series of in-depth interviews, and a survey with NEST members, to find out more. Read our research report, Life events and pension engagement (PDF)