Financial education is more important than ever as a wide range of Brits continue to struggle to manage their finances. In an insight last week, we looked at how pension providers were supporting members with generic financial education and support, and today we look at who can make this more personalised in order to meet the members needs and drive better outcomes.
The Coronavirus pandemic has exacerbated the financial problems of many people in the UK making financial wellness propositions, including financial education, an increasing priority for many employers who are reviewing and/or selecting a workplace pension provider.
With many calling for financial education to be added to the school curriculum, many financial services providers are stepping into the gap in the meantime to produce a range of financial education offerings.
Everyone has different financial and personal circumstances and therefore personalised financial education can prove invaluable. Our data shows that all providers other than Royal London and True Potential provide some form of personalised financial education for their members.
The providers who support this can all take a members age and retirement age into account in order to deliver a more bespoke and meaningful personalised financial education service. Other than Aegon Master Trust, Aegon Workplace ARC, Standard Life and Standard Life DC Master Trust, they also all take income and expenditure into account.
Family status is taken into account less frequently but over half of providers still take it into account (Aviva Designer, Aviva My Money, Aviva My Money Master Trust, Cushon, Fidelity, Fidelity Master Trust, Hargreaves Lansdown, Legal & General, Legal & General Master Trust, Scottish Widows, Scottish Widows GSIPP and Scottish Widows Master Trust can all take family status into account when delivering bespoke financial education.)
It can be hard to provide personalised financial education to a workplace pension member if you do not know the starting point you are working from. Our data shows that other than Mercer Master Trust Aviva and Mercer Master Trust Scottish Widows, all workplace pension providers that offer personalised financial education support members in understanding how good their level of financial knowledge is. They all offer this online with most (other than Standard Life and Standard Life DC Master Trust) also offering it face to face (in person or screenshare), via application or mobile device and via video content.
Getting people actively interested in their workplace pension is notoriously difficult, not helped by industry jargon and rhetoric. However, many workplace pension providers have realized that the more a member understands about their pension options, the more likely they are to be actively engaged in their retirement planning.
However, the personalised financial education on offer when it comes to workplace pensions varies hugely by provider.
We are pleased to see that Aegon Master Trust, Aegon Workplace ARC, Aviva Designer, Aviva My Money, Aviva My Money Master Trust, Fidelity, Fidelity Master Trust, Legal & General, Legal & General Master Trust, Scottish Widows, Scottish Widows GSIPP, Standard Life and Scottish Widows Master Trust all offer personalised financial education on all categories we asked around workplace pensions.
Mercer Master Trust Aviva and Mercer Master Trust Scottish Widows offer the narrowest personalised workplace pension education service with it only covering the basic state pension, information on the various retirement options available, and information on the available fund and investment options.
Hargreaves Lansdown, whilst offering information on most topics, does not provide links to The Pension Advisory Service, The Money Advice Service or The Pension Regulator.
Interestingly, whilst information on the basic state pension is supported by all providers, only 10 providers include links to the state pension forecast to help members understand what their state pension income could be, making it the least well supported aspect of personalised financial education programs when it comes to retirement planning.
More pleasingly, the information provided on the various retirement options available are quite wide. Most providers include information on the Open Market Option, wake up packs, information on uncrystalised funds pension lump sums and annuities, and information on flexi-access drawdown.
It is not just pure workplace pensions matters that providers are helping to provide education for. By helping members have a broader understanding of financial matters, they are helping them gain the confidence to engage with their workplace pension on a deeper level.
Our data shows that all workplace pension providers who offer personalised financial education support members with building their general financial education. They can help members with topics such as improving their credit score, how to budget and emergency cash funds.
This support is offered online. Other than Standard Life and Standard Life DC Master Trust, they all also offer support via an app or mobile device and via video content. Face to face support is also common with all providers other than Standard Life, Standard Life DC Master Trust, Mercer Master Trust Aviva and Mercer Master Trust Scottish Widows offering this.
One area that is less well supported is will writing. Only 11 workplace pension providers provide any information on wills as part of their personalied financial education offering and only 5 offer a will service.
Employers are well supported in the personalised financial education process. Only Aegon Workplace ARC and Aegon Master Trust do not offer to include bespoke content provided by the employer as part of the financial education on offer.