Pension Freedoms gave savers more control over the pension savings than ever before. Workplace pension members now make more decisions that will impact their retirement with a lot of information needed to make an informed decision.
Our latest insight looks at how workplace pension providers are making it easier for members to understand the information they are provided with via the provision of video pension statements.
Traditional annual pension statements sent in the mail or online by workplace pension providers contain a lot of information that can be difficult for many members to understand, if they are even opened and read at all!
In recent years, workplace pension providers have been exploring ways of making pension statements more accessible. One solution, which is now offered by most providers is video pension statements.
With the Coronavirus pandemic leading to more of us managing our work lives and our finances online, video platforms have grown hugely in popularity with more people choosing to engage with a wider range of video content.
It is perhaps therefore not surprising to see that in the past year, more providers have started offering video statements. A year ago, only half of workplace pension providers offered personalised video pension statements, now there are only six provider propositions who do not.
The six solutions who do not currently support or offer personalised video pension statements are Aviva Designer, Cushon, Hargreaves Lansdown, Royal London, Scottish Widows GPP and True Potential.
However, most provider who do offer this service, do restrict access to these video statements. Only Aegon Master Trust, Aegon Workplace ARC, Mercer Master Trust Aviva, and Mercer Master Trust Scottish Widows provide video statement to all scheme members of all their workplace pension schemes.
For Aviva My Money, Aviva My Money Master Trust, Legal & General, Standard Life and Standard Life DC Master Trust they are available to all members but only by specific agreement with the employer/trustee.
Our data shows that ten solutions include audio in their video pension statements. Of these providers Fidelity, Legal & General and Scottish Widows read all numeric values. Legal and General using a voice-bot and Fidelity and Scottish Widows use a pre-recording. Mercer Master Trust Aviva, Mercer Master Trust Scottish Widows, Standard Life and Standard Life DC Master Trust videos read out some numeric values using pre-recordings. Aegon and Aviva offer video statements which prompt the user to look at the video with no audio included.
When it comes to what information is included, the most commonly included data is current fund value, information regarding the state pension, and the projected pension fund value at the selected retirement age. The least commonly included information are the current investment fund choice, total tax relief received for the current year, and suggested additional contributions required to meet required income levels.
Other than for members of a Fidelity pension scheme, all video statements are interactive in some way and will ask the user to carry out specific actions or click through for further information.
No workplace pension providers have chosen to develop the video pension statement service in house. Idomoo is the most commonly used supplier and is used by Aegon Master Trust, Aegon Workplace ARC, Aviva My Money, Aviva My Money Master Trust, Mercer Master Trust Aviva, Mercer Master Trust Scottish Widows, Standard Life and Standard Life DC Master Trust. Legal & General and Legal & General Master Trust use VideoSmart, whilst Standard Life and Standard Life DC Master Trust use a combination of Idomoo and BT Enterprise. Fidelity and Scottish Widows have not disclose who they have used.
Most videos are less than two minutes long, with only Aegon, Legal & General, and Standard Life being longer.
The video statements from Aegon Master Trust, Aegon Workplace ARC, Mercer Master Trust Aviva and Mercer Master Trust Scottish Widows move beyond the display of information by including interactive questions to learn more about the member’s needs. They also provide immediate feedback on how the user than improve their financial situation.
All providers also capture video engagement metrics including demographics, time spent watching the video, and how many times it was watched.
As a result of these metrics, providers are also able to measure what direct actions or changes have taken place as a result of watching the video.
For some members, a video statement will drive home the need to pay more into their pension. Some providers reported that up to 20 per cent of members increased their contribution levels after watching the video statement. This is a fantastic result and could demonstrate the value of offering a video statement, alongside the more traditional options. The increase was mainly made to both employer and employee contributions, with Aviva being the only provider to report an increase solely in employer contributions.
Overall, it appears that more of us are choosing to engage with a wider range of video content, it is heartening to see that workplace pension providers have embraced this with more now offering video pension statements, with this service now almost becoming a hygiene factor and seemingly helping members save more for their retirement.