Test your communication early to achieve the best results
Working out the return on investment of different communication media delivery channels has become increasingly possible due to advances in methods such as econometrics. Email dashboards can shine a light on how many of your emails were opened, when, who by and which links they clicked on and a whole lot more besides.
But trying to work out if the creative ideas that drive media deliverables will have the desired impact remains difficult. Because it’s hard to accurately and objectively measure something that is so inherently subjective. One person’s ‘wow’ will be someone else’s ‘yawn’.
Despite this (according to a survey conducted by Marketing Week), almost two-thirds (61.8%) of marketing communicators are at least trying to measure the effectiveness of their creative ideas.
It may surprise you to know that whilst over 90% of those looking to do so use some kind of retrospective/post-launch measurement loop, only around 40% carry out some form of pre-launch assessment. So less than half as many communication campaigns are tested in advance than are tested after having been designed, developed and delivered. Presumably meaning that more than half of the people behind such communications are ‘hoping for the best’.
Whilst this may well explain some of the more cringeworthy adverts you can remember over the years; it actually compares favourably when compared with the degree of pre-launch assessment that typically happens in the context of pension communications.
At Concert, we back ourselves to know what’s hot and what’s not when it comes to developing creative communications that will help drive member behaviours. But whilst the retirement savings landscape is broadly the same for all, the specific circumstances and history of each plan membership are not. Tailoring the message and the media based on member validation can mean the difference between members ‘getting it’ or ‘forgetting it’.
Additional effort to pilot branding and messaging ahead of going live can help trustees and/or plan sponsors build success into their communication projects – especially if these are intended to promote or support specific member actions.
Chancellor provides relief from tapered annual allowance
In Wednesday’s Budget, Chancellor Rishi Sunak announced changes to the very complicated way in which high earners are taxed.
The current ‘tapered annual allowance’ rules basically mean that most people who earn more than the ‘threshold income’ limit of £110,000 a year get less and less tax relief on their pension contributions – potentially facing large tax bills as a result. The tax relief reduces to a minimum amount when ‘adjusted income’ is £150,000 or more.
Threshold income is broadly defined as someone’s total taxable income for the year, e.g. salary, bonus, pension income (including State Pension) and taxable social security payments. Adjusted income is broadly defined as threshold income plus all employer pension contributions, to prevent individuals from avoiding the restriction by exchanging salary for employer contributions.
The rules have been widely criticised because they have resulted in some NHS consultants and GPs refusing to work extra hours because they were receiving large and unexpected tax bills. This has in turn led to longer waiting times in hospitals and GP surgeries.
The changes announced in the Budget mean that both limits will be increased by £90,000. From 6 April 2020 ‘threshold income’ will be £200,000 so individuals with income below this level will not be affected by the tapered annual allowance. The annual allowance will only begin to take effect for individuals who also have an ‘adjusted income’ above £240,000.
At the same time, the minimum level of relief, for those on the very highest incomes, will drop from £10,000 to £4,000.
These reforms will cost the Government £180m in the first year.
State Pensions increase by 3.9%
From 6 April 2020, the State Pension, for those who reached their State Pension Age on or after 6 April 2016 will rise by 3.9% to £175.20 a week (£9,110.40 a year).
For those who reached their State Pension Age before 6 April 2016, they will see their Basic State Pension also increase by 3.9% to £134.25 a week (£6,981.00 a year). These individuals may also receive an additional pension from the State in respect of the State Second Pension (S2P), formerly called the State Earnings Related Pension Scheme (SERPS). The amount they receive will depend on their earnings before reaching their State Pension Age. Some members may receive some of this additional State Pension as part of the pension they receive from any company pension arrangement they have.
How is the increase to State Pensions calculated?
Increases to the New State Pension and Basic State Pension are calculated as the greater of:
- the rate of inflation (measured by the increase in the Retail Prices Index) or
- the average increase earnings (measured by the National Average Earnings Index) or
- a minimum increase of 2.5%.
This is often referred to as the ‘triple lock’. This year the National Average Earning index produced the highest of the three potential increases with an increase of 3.9%.
For those members who reached their State Pension Age before 6 April 2016, the increase to any additional State Pension they receive, above the Basic State Pension, is calculated using the rate of inflation only. Therefore the increase to this part of their State Pension will be 1.7%.
What else is changing for pensioners?
The Adult Dependency Increase (ADI), which is paid to some as part of their State Pension, will cease to exist from 6 April 2020. ADI is paid to pensioners with a financially dependent spouse but since 2010, the Government has been gradually phasing it out. Members who are currently receiving the ADI as part of their State Pension may be eligible to apply for Pension Credit or Universal Credit. You can find more information on the HMRC website.
Click here to open the page on the HMRC website which explains State Pensions in more detail.
Gamification time for pensions?
According to the Data and Marketing Association, two-fifths of UK consumers have used augmented (39%) or virtual (38%) reality to test or view a product they’re considering.
A further 45% have used an app to motivate them to ‘stick to a personal goal’, for example to complete weekly exercise challenges. And 39% say they are ‘open to new challenges’, offering brands the opportunity to apply gamification beyond health and fitness.
However, brands should be aware of consumers’ approach to data sharing. While 58% say they are willing to share data with brands, up from 45% in 2016, brands need to ensure consumers have clarity and control over their data.
At Concert, we wonder what implications this has for pension scheme and retirement saving.
It’s now six years since the app-based ‘Bolt to the Finish’ game purported to encourage 36,000 Kingfisher employees to engage with retirement through ‘gamification’. Not much more has been heard since.
But maybe that’s because this wasn’t actually gamification – which rewards desired behaviour(s) through a variety of game-playing elements (e.g. point scoring, competition with others, socialisation).
Genuine gamification of retirement saving would look more like handing out stickers for achieving certain savings or investment goals, than Pensions Pac-Man…
But given the Data and Marketing Association research, maybe it’s time to take another look at how the pensions industry could use augmented, or even virtual reality, to help engage more people with saving for retirement.
What Does 2020 Hold for Pensions?
Pension schemes have always had to deal with large amounts of industry and regulatory changes, and now The Pensions Regulator (TPR) has sent a very clear message that robust governance must not be allowed to slip.
The recently reintroduced Pension Schemes Bill will enforce new powers for TPR enabling action to be taken sooner, significant fines to be imposed, a better view of corporate transactions taken to prevent reckless behaviour and help protect savers’ money. Although the majority of pension schemes are very well run, high profile cases such as Carillion and BHS have damaged public confidence in the UK pension system.
We will also see changes to member communications being high on the agenda.
Member engagement with their retirement savings is too low and the Pensions Bill brings some clarity on the future of the Pensions Dashboard (the digital solution that will allow people to see all their lifetime pension savings in one place). Although still some way off completion, Schemes will start to receive details about the data standards to move the Dashboard forward. This could result in Trustees and providers needing to carry out major work to cleanse their data.
Ultimately, this could be good news for members, but the question is ‘will this also help by providing members with a better understanding of their retirement benefits’? Communication with members is key but the message from members remains that information and communications are still complicated and difficult to understand.
Hopefully 2020 could be the kickstart that members and Schemes need.
Staying data safe
We know that the protection of your members’ data is one of your greatest challenges and priorities. It is for us too. We have communication responsibilities for over three million pension scheme members, the vast majority of which involve data management of one sort or another.
I am therefore delighted to report that we have received our ISO 27001 accreditation…. for the ninth successive year. This year saw not just a review but a two day root and branch examination of all our processes around data management and protection. Whilst I am told it was not much fun it has been rewarding!
We have based a number of our other processes on the ISO27001 model and we plan to extend this as we continue to grow the business.
If you would like to hear more please contact your client manager, and as always, thank you for your support.
Online security – not just a data protection issue
While the majority of attacks on websites are by hackers looking to steal valuable personal data, there are a number of other reasons why it’s of crucial importance to maintain strong security on any website or web facing application. This is true even for websites that don’t hold any personal data.
1. Hacked websites can attack visitors
Once a website has been compromised by hackers, they can add malicious software that will run in the browser of every visitor to the site. The damage this software could do is extensive and includes (but is not limited to):
- Redirecting traffic to other malicious websites
- Infecting visitor’s computers with malware, including key loggers than can steal passwords, banking details, credit card numbers or other sensitive information
- Hijacking visitor’s computer resources to mine cryptocurrency or send spam emails
2. Damage to reputation
Sometimes hackers aren’t looking to steal data or resources, they’re just looking to cause mischief or make a political statement by defacing the website of a well-known brand. While there is no loss of data, or threat to visitors, the damage to the website owner’s reputation and the trust placed in them by their members can be very serious. Particularly if the defacement is offensive or antithetical to the values of the company. Reputation and trust take a long time to build but can be destroyed in an instant.
3. Search engine ranking
Google (other search engines are available) periodically checks every website that it indexes for potential security issues and evidence that the site has been hacked. If it finds any issues it will penalise that website by removing it from its search results and adding it to a blacklist. This means that the website will not be found in Google searches, and any browsers that support this blacklist initiative (all the most popular ones) will show a big red warning screen to all visitors that try to access the website. Getting a site removed from the blacklist can be tricky, and requires proving to Google that you’ve fixed the issue and removed all traces of the attack. Blacklisted websites typically lose 95% of their visitors.
How do Concert ensure websites are secure?
All the websites and applications we build are built with security first and foremost. We follow the principles of security by design, the UK Government National Cyber Security Centre’s principles of secure development and deployment, as well as targeting the OWASP top ten web application security risks. This gives us a solid foundation to build secure web applications. To confirm all our applications are built to the required security standards, we insist our sites are independently penetration tested by third-party security experts. This ensures that we have successfully secured the applications, kept our clients’ data and their members’ data safe, and protected their reputations too.
“Keep pension benefit statements simple – or we’ll legislate”
The government will consider legislation to make pension schemes simplify annual benefit statements, if they don’t do it on their own, says Pensions Minister Guy Opperman.
The warning has come after the government released a consultation paper on the simplification of workplace pension statements, with plans for shorter and simpler annual benefit statements, which are less intimidating and more likely to be read.
In the paper, the Department of Work and Pensions (DWP) wants to gather opinion on how to make statements shorter and easier to understand, while addressing three key questions:
- How much money savers have in their pension pots?
- How much money they could have when they retire?
- How can they boost their retirement income?
It looks at how to deliver better annual workplace pension benefit statements that are shorter, simpler and will help members plan for their retirement aspirations and lifestyle.
Opperman wants pension providers to commit to giving savers clear information about their pension prospects, ideally on no more than two sides of A4.
He says: “Pension benefit statements are too long, too wordy, full of jargon and confusing for savers. People don’t read them, and if they do, they can’t make any sense of them. Simpler statements provide clear information that members will actually understand, and this will hopefully encourage them to save more.”
“I want pension schemes to drive forward real change quickly, but, if necessary, I’ll consider regulation.”
British Steel trustees are cleared by The Pensions Ombudsman
The Pensions Ombudsman has rejected a number of complaints against the trustees of the embattled and collapsed British Steel Pension Scheme (BSPS).
The Ombudsman has given final consideration in four lead cases, after accepting 229 complaints in March last year. While each case was individual and differed slightly, all included a point about the lack of information given to members concerning cash equivalent transfer values (CETV) and/or early retirement factors (ERF).
They concluded that the trustees were proactive in providing information which was clear and well explained and noted that it was not misleading (and was not intended to be) and did not amount to scaremongering.
At the time, reports emerged that BSPS members received poor communications, which tried to outline the issues and developments of the Scheme restructure and expressed that “no action was required” which sparked no concern or interest from the members.
The complaints follow the long-winded fallout of poorly advised Defined Benefit (DB) pension transfers to members of the old BSPS Scheme, who in 2017 were given the choice of staying in the original Scheme and going into the Pension Protection Fund; moving to a new Scheme with better benefits - BSPS2; or transferring out of the Scheme all together.
As a consequence, the calculation methodology behind CETVs and ERFs was changed on 1 April 2017, with the result that members who requested a transfer value or retired early from the old Scheme after that date, received significantly higher benefits than those who had already transferred out or taken early retirement.
The case illustrates the difficulties faced by the trustees in trying to explain what can be complex and fast-moving issues, and the difficulties faced by members in trying to understand and act upon the information they receive.
An independent review into the handling of the BSPS scandal, highlighted that trustees could have done more to direct BSPS members to regulated IFA’s, as some Scheme members were targeted and pressurised into transferring their money into dubious investment Schemes by unscrupulous, unregulated financial advisers.
It also stated that it was clear that some members of the BSPS had suffered as a result of inadequate communications, rushed timescales or bad advice, but that it was important to look at the issues in context to make sure industry regulators and trustees learn how to protect members involved in future pension Scheme restructures.