Adding explainer videos to boost member engagement
Ensuring your members are well-informed on complicated topics like Expression of Wish or their Pension Benefits can be a challenge. Explainer videos are great assets to add to your pensions website because they help explain this complex information in a simple way, essentially getting the basics across step-by-step in a short amount of time.
We often produce short animated explainer videos, and recommend they are no longer than 90 seconds, as viewers are more likely to watch them in full. These videos help boost digital engagement and can be used as places to go for further information through links from other publications.
Below you can find links to examples of the videos that we’ve produced for our clients on some of the topics mentioned above:
The science behind it:
By utilising multiple senses, auditory (voiceover) and visual (infographics and animation), the human brain can absorb more information in a shorter amount of time, but more importantly, the viewer is more likely to understand difficult principles and retain them.
Richard E. Mayer (Professor of Psychology at the University of California) formulated the Cognitive Theory of Multimedia Learning (Mayer). This principle known as the “multimedia principle” states that “…people learn more deeply from words and pictures than from words alone.” 1
This theory proposes three main assumptions when it comes to learning with multimedia: 2
- There are two separate channels (auditory and visual) for processing information.
- Each channel has a limited (finite) capacity.
- Learning is an active process of filtering, selecting, organising, and integrating information based upon prior knowledge.
- Mayer, R. E. (2009). Multimedia Learning. Cambridge University Press.
- Mayer, R. E. (2002). Multimedia learning. Psychology of learning and motivation, 41, 85-139.
A busy 2020 is predicted for the pensions industry
Pension experts have forecast a hectic 2020 for the industry, with the expected Pensions Schemes Bill and increased calls for responsible investment top of the list of activity.
Although Brexit negotiations could delay the bill, collective defined contribution (DC) scheme legislation, increased powers for The Pensions Regulator (TPR) and the introduction of the pensions dashboard are likely to feature in the coming year when the bill is introduced.
Climate-friendly investment strategy regulation is reportedly likely to increase, with pension schemes’ best practice expected to face further scrutiny.
This year is set to be a turning point for pension schemes getting to grips with environmental, social and governance (ESG) issues, with climate change being a hot topic.
Regulators will continue to demand action with trustees being required to make additional disclosures on their planning and management of material ESG risk factors within their Statements of Investment Principles by 1 October 2020.
It’s expected that there will be a revision and tightening-up of best practice regarding pension funds embedding climate action into investment strategies.
It’s not enough to simply create frameworks such as sustainable development goals, pension funds will have to look at them from an investment point of view to map their portfolios and align themselves without impacting the expected risk adjusted returns.
There are three changes that are confirmed for 2020 – the state pension age will rise to 66, the state pension will increase by 3.9 per cent to £175 a week and the lifetime allowance will increase to £1.073m, in line with the consumer price index.
Several other regulatory reviews look set to improve outcomes for pension savers, with regulators pressing for schemes to consolidate, leading to better governance and economies of scale.
Designing pension comms to pack a punch
Presenting pensions information in a user-friendly way can be a challenge, but one where design can play a vital role. To grab members attention and keep them engaged, here are a few ways we use design and graphics to fine tune good content into polished and engaging communications…
Breaking large amounts of copy down into punchy sections and establishing a typographical hierarchy for headings, paragraphs, pull-out quotes, hyperlinks etc. helps bring about order and allows the reader to prioritise information. By doing this, members can see top level information at a glance and drill down to the detail if they want to learn more.
By tapping into common visual language using a set of cohesive icons we can add colour and visual interest whilst communicating an idea quickly. Icons are particularly useful in digital communications where they represent something functional, like a play button or in a navigation menu on a mobile device where space is at a premium.
These can be a useful way to ‘shine a light’ on key facts and figures. There are a multitude of options to show different types of data, and for websites charts can be interactive, displaying sets of specific data by tapping or clicking on headings.
Where a collection of data or a process, requires explanation, sometimes an infographic is the best solution. Infographics are a collection of imagery, charts and key text which collectively convey information quickly and clearly. As with all good design elements, as well as being visually interesting and engaging, the key point is that the infographic communicates and helps the reader understand the content.
All of the above should be produced in a way which incorporates elements of the brand identity, ensuring that all communications are consistent in look and feel, are easily recognisable and carry the right tone.
Millennials are driving interest in sustainable investment
Sustainable, socially responsible or ESG (environmental, social and governance) investing is on the rise, in companies or funds which aim to achieve market-rate financial returns, while pursuing positive social and/or environmental impact.
According to a number of studies, millennials (born between 1981 and 1996) are universally more engaged in corporate social responsibility efforts and are driving up demand for sustainability, looking at how they spend, where they work and how they invest.
As responsible investing becomes increasingly mainstream, and millennials become the major beneficiaries of the transfer of wealth, institutional investors, such as pension funds, amongst others are expected to pile into ESG over the next few years.
However, in an analysis of 16 of the largest pension schemes, just two schemes were directly engaging with large global companies on their role in the climate crisis. And were the only schemes to go into depth on climate change, acknowledging the need for robust engagement with companies in their portfolio to reduce their carbon emissions.
The vast majority are falling short on climate change duties, despite new regulations introduced in October last year, which require schemes to publish policies on how they specifically incorporate climate change and other environmental, social and governance (ESG) issues.
On a more positive note, the analysis did also find an increase in the amount of ESG and climate focussed funds' incorporated into master trusts default asset allocation.
ESG issues are now the top priority for millennials. They understand that it’s perfectly possible, and increasingly necessary to make a profit, while positively and proactively protecting people and their planet.
They are driving up demand for corporate social responsibility and sustainability more than ever, and with sustainable investing drawing more support, millennial investors will continue to lead the way.
Pension reforms expected after Tory majority
Following the Conservative Party’s comprehensive victory in the general election, sweeping pension system reforms are expected.
The Conservative win means it can implement its pension manifesto pledges announced at the end of last month, which included, holding reviews of the tapered annual allowance and net pay schemes. Plus, plans to reintroduce the pension schemes bill.
The ‘triple lock’ (which is a guarantee to increase the State Pension every year by the higher of inflation, average earnings or a minimum of 2.5%) stays, along with the winter fuel payment and bus passes for those over State Pension age.
Other commitments in their manifesto include:
A shake up in the Defined Benefit (DB) sector
The Conservatives promised to revive the three-part pensions bill, so the Defined Benefit (DB) sector could expect a shake-up, with new powers for the Pensions Regulator and the introduction of criminal proceedings for directors who fail to adequately protect DB schemes.
A fundamental reform of the tax treatment of pensions
Tinkering could make the pension system more dysfunctional, and the best solution would be a fundamental reform of the tax treatment of pensions across the board.
The Pension and Lifetime Savings Association (PLSA) voiced support for tax reforms and the pension bill, but said in a statement the Government “must not stop there” calling for more work towards retirement income adequacy.
Concert Consulting’s Head of Operations is nominated as a Rising Star 2020!
Our very own Lee Bacon has been nominated for a Rising Star Award as Mentor of the Year 2020.
Lee is an amazing colleague to work with and his knowledge on pensions is extensive, which he is always happy to share with us.
The Rising Star Awards celebrate ‘emerging talent in pensions, recognising and identifying the sector’s future leaders as well as shining the spotlight on the organisations and individuals that are helping develop and foster new talent in the industry.’
The gala event runs annually, is hosted by Professional Pensions events and is supported by many of the big names in the pension industry.
Congratulations and well-done Lee, from all of us at Concert.
Property vs Pensions pros and cons
The property vs pension debate continues.
For those involved in the pensions industry, it’s depressing that this debate is still going on – especially since most experts feel that pensions have been the resounding winner every time the subject has come up.
People feel pensions are risky and don’t trust them. When they read news stories about pensions, they’re almost always negative.
By contrast, when people read about property, the stories about price rises are positive. They feel they can trust bricks and mortar, because they can see a physical presence of their investment, which feels more positive than a figure on a statement.
Pros and cons of property investment
- Phenomenal growth in property values;
- Immediate income and long-term profit; and
- Sell the property and invest the money in other ways.
- Time consuming and requires a lot of effort;
- Buying and selling can be costly and drawn out;
- The risk of being left in negative equity;
- Tax changes have made property investment less financially rewarding; and
- Property counts towards your estate and is subject to inheritance tax.
Pros and cons of pension investment
- Extremely tax-efficient, the government will top up contributions;
- Pension freedoms give you a greater degree of choice in accessing your pension;
- You can get 25% of your pension tax-free; and
- Pensions don’t count towards your estate for inheritance tax purposes.
- You can’t access your pension until you’re 55;
- With a workplace pension you don’t have any say in how your money is invested;
- The government could change the rules on how you access your pension;
- If you take your entire pension in one go, you’ll need to plan carefully to make sure it lasts; and
- Your pension fund could lose money, or the company could go bust.
Pensions boosted under proposed living wage
Increasing the national living wage to an hourly rate of £10.50 would result in a pension boost of £333, according to calculations from Quilter (a leading provider of advice, investments and wealth management, both in the UK and Internationally).
Chancellor of the Exchequer Sajid Javid announced, in September, at the Conservative Party conference that the government aims to raise the national living wage to match two-thirds of median earnings over the next five years.
This would mean an increase from the current £8.21 to £10.50, according to current forecasts.
“We will make the UK one of the first major economies in the world to end low pay altogether,” Mr Javid said in his speech.
According to calculations from Quilter – based on a 35-hour week and holiday pay – the salary of an individual on the national living wage would increase from £14,942 to £19,110.
Considering auto-enrolment’s minimum contributions of 8 per cent, the total annual pension payments would rise from the current £704.48 to almost £1,038.
Jon Greer, head of retirement policy at Quilter, noted that individuals receiving the national living wage may not realise that this announced pay rise will also bring with it benefits for their retirement.
He said: “Not only will they be putting more money away for retirement, but it also means their employers and the government, in the shape of tax relief, will top these contributions up by more too.”
“This could result in an extra £333.44 each year being saved for retirement by someone on the national living wage at its new rate.”
“This is a fairly substantial increase and shows, along with the power of long-term investing, that pensions continue to serve an essential purpose in today’s society.”
He said: “The government has done an admirable job so far in highlighting the benefits of auto-enrolment, and it’s crucial that it continues its campaign to increase the visibility of pensions, and ensure this new generation engage as early as possible to help get rid of any negative feelings towards saving for retirement.”
However, not all are supportive of the proposals.
The Federation of Small Businesses warned the pledge would be a challenge for small employers.
National chairman Mike Cherry said: “While it is welcome that the chancellor is giving businesses five years to adapt, this increase will leave many small employers struggling and, without help, could make some small firms unviable.
“Four in ten small employers say operating costs are rising due to employment costs."
He called on the chancellor to uprate the Employment Allowance introduced by George Osborne to bring down the costs of employment.
He added: “Any drop in age eligibility for the National Living Wage should be gradual. A sudden drop to 21 poses a real risk to jobs and the economy."