Pensions is a numbers game – but most people don't 'like' numbers.

Take my simple life:

Born '64, life expectancy at birth, 77, now rising to 85 or a maximum 95, retiring at 70 (not 60). Put me in a 2030-35 target date fund, tell me my contribution should be 24% (half my age) but that my actual rate is 8% (me) + 5% (employer) + tax relief at x%, giving a projected fund of £345,678.90 (assuming a projected return of 6.5%); but that's not the pension I'll get because I then have to choose an annuity OMO with/without survivor's benefits and escalation...

Please stop!!!!

Instead, here's another number: 18. Because, tell me, what on earth does the average 18 year old make of all this?!

Simple, they turn off. And instead they're going to be squeezed by two trends:

1. Their current average debt on leaving tertiary education could be £53,000 (see this article from the BBC)

2. And there'll be more elderly dependants (me) relying on them to pay taxes and subsidise my somewhat lacking retirement income!

We need one more number – but this is an important number from our point of view. Scientists talk about "tipping points" and philosophers of an "eureka moment" – that experience when your world view suddenly shifts permanently and you suddenly "get it" – whatever "it" is. 

The number I'm looking for is an age. It creeps up on us so gently, so incrementally, that it's difficult to pin down. It's like that feeling you have when you are no longer 21, 21, still 21, but suddenly you're 36 and you're no longer young, free and single, except in your mind's eye… you have a spouse, 1.3 children, a mortgage, some hard-won wisdom… and now you wish you'd started saving for retirement 10 years ago…!

But when do you "get it"? And why didn't you notice?! We know that people don't start, as they rationally should, saving a small percentage of their income when they start work. Humans simply aren't 'rational economic units.'

So what then what do we do to engage that 26% of the population who are currently under 30 in a meaningful way? And what do we do to get the attention of anyone – whatever their age – so that the lights come on and they start preparing for the future?

I say we need to stop "doing pensions communication" and become the people who activate that awareness tipping point.

Not everyone understands what communication is. It's not simply marketing, which results in putting happy smiley pictures of well-preserved old white people in white linen on white beaches with white teeth to "sell" the pension plan successfully. Some providers still think this is good communications.

We need a new type of communicator – one that might use marketing and education – to get attention and awareness and to build understanding – but that always seeks to go further and operate at a higher order level – an intentionally "behavioural" level of communication.

We need to focus on overcoming fear and "decision errors" (the behavioural economist's term for those things which trick us into making bad decisions). Things like:

- loss aversion
- discounting
- optimism and present bias
- being overcome by choice
- inertia in the face of complexity.

We need to:

- Create comfort with risk instead of loss aversion
- Give employees regular reality checks and challenge their thinking
- Help them track their progress
- Give them more of a future focus
- Simplify choices (why do we send a pensions booklet which explains annuities to a new employee aged 22?)
- Reduce complexity
- Create comfort by reminding our audience that there are "people like you"
- Create trust by making it personal
- And finally, give regular feedback and reward positive actions so that we create regular habits and lock in good behaviours.

This is your responsibility! Government is weak and ineffectual at creating social change. We need to be smarter, more intentional, more focussed on getting employees across the nation engaged at a level that changes minds.

Written by Alex Thurley-Ratcliff, strategic consultant SHILLING Communication