How to create an effective pension communications strategy

Workplace pensions have always proved challenging when it comes to engaging employees with their benefits. 

At a time when attention spans are already stretched, employers must build multimedia pension communication strategies that are tailored to a diverse workforce, where each employee has a unique demographic profile, learning preferences, and baseline level of financial awareness.

Employers often fail to define the key audience. Any pensions communications strategy should, therefore, begin with a baseline understanding of the workforce’s demographics, explains Shaily Sodha, strategic partner in the communications practice at Gallagher.

“A successful communication strategy will acknowledge that members are at different stages of their lives and careers, and therefore process information differently,” she says. ”Older people might be less tech-savvy and prefer a face-to-face chat over a video call. In contrast, a younger person might be open to email campaigns, social media webinars, and even personalised apps.”

There is also the issue of language; the average pensions communications package is rife with complex terminology and jargon. A strategy that is to the point and in plain English is critical to the success of a project. “When we discuss a defined contribution (DC) scheme, we must never assume that a worker knows what we’re talking about,” says Sodha.

Retirement prospects

Effective pension communication strategies are vital to building engagement and improving people’s retirement prospects. Scottish Widows’ Retirement report, published in August 2024, revealed that 38% of people are not on track for even a minimum standard of lifestyle in retirement. The key lies in adapting communications to the specific needs of employers and their staff.

Susan Hope, workplace savings specialist at Scottish Widows, says: “In some sectors, employees have a stronger understanding of the benefits of contributing to their workplace pension. For those employers, our support would focus on maximising engagement and providing new hires and soon-to-be retirees with valuable guidance. Other employers may require more support from our team of experts to help boost their internal engagement.

“Helping employers increase pension engagement isn’t a one-and-done thing either, it’s a commitment to building an ongoing, strong relationship. Once workers understand the basics, you must continue to engage, maintain an open door for communication and help answer any questions they may have to maintain their interest.”

Communication channels

However, it is not only about the practicalities of what is communicated. Equally important is where the message is sent. In a multi-device mobile world, the strategy must take advantage of all available channels.

“For younger employees, it would make sense for [an organisation] to create a suite of cross-platform compatible options, such as mobile-friendly portals, tailored social media and app notifications, while older employees may prefer to read about their pension in a printed letter,” says Sodha. “However, it’s important to let each employee dictate their preferred way of engaging in the pension conversation.” 

Employers should also focus on the importance of education, and before thinking of the best communications channel to promote pensions, to take a step back and think wider than pensions alone, says Nick Howarth, senior employee benefit consultant at Mattioli Woods.

“All employees can benefit from financial education in the workplace that specifically focuses on their short-term, medium-term and long-term financial planning,” he explains. ”Given the recent cost of living rises, many employees need to consider their financial situation, which heavily involves pensions plus other financial objectives, such as weddings, mortgages, holidays [and so on]. High interest rates have rewarded savers with higher returns, but borrowers may be suffering. All these subjects should be addressed alongside their long-term financial planning and pension.”

Tailored financial education

Raising awareness of the workplace pension can be enhanced by keeping employees abreast of topical issues relating to retirement planning. For example, tailoring financial education sessions to career stages helps keep employees interested.

“Those early in their career may be more attentive if the discussion around the pension highlights how they can control where their fund is invested, especially given the increased focus on environment, social and corporate governance (ESG) options,” says Howarth. “In contrast, later stage employees are likely to be more focused on understanding their income options in semi-retirement and life after full-time employment.”

Language, style, design, and imagery are all important factors in creating an effective pension communication; however, the most critical element is delivering content that is clear, concise, and easily understandable. This means using language that resonates with the audience, avoiding jargon where possible, and maintaining consistency when its use is necessary, says Rob Hughes, head of customer experience, at Railpen.

“It isn’t easy to take something complex and make it meaningful to everyone, but it is worth investing the time and effort to try,” he explains. ”It’s also important to be clear on what success looks like. Employees don’t want to spend huge amounts of time thinking about their pension. If members can engage with their pension benefits, even for a short time, once a quarter that should be considered a good outcome.”