EUROPE - A study into the attitudes of pension scheme members has revealed many individuals are put off by messages suggesting pensions are an investment, and are more amenable to the concept if described as ‘savings'.

A series of pensions member focus groups conducted by asset manager BlackRock has found not only do UK defined contribution pension plan members want clear, simple information on pensions, but the language applied to explain the importance of saving for retirement may have a major psychological impact on whether they act.

As a result, BlackRock officials say they will change their own marketing and communications messages to ensure information about the need to save, and whether the right amount is being saved, targets the ‘building society mentality', because its research revealed the word ‘investment' is too strongly associated with taking risks with an individual's pension.

When testing the language individuals were more responsive to, BlackRock found "words matter", said Steve Rumbles, managing director, so phrases such as ‘enjoy your retirement', ‘are you on target' and ‘save for your future' were seen to work compared with ‘prepare for an extraordinary life', ‘your retirement is your responsibility' and ‘invest in your future'.

Eight focus groups were conducted in High Wycombe, London, Warwick and Stockport in June across four age groups - 18-29, 30-39, 40-49, 50-65 - and revealed what could largely be seen as the expected views of individuals: pensions are too expensive to deal with at a young age, but as individuals get older they wish they had and feel it is too late to act.

More specifically, individuals questioned said they were reluctant to save for retirement because the lack of explanation often meant people felt the money was "being put into a black hole", according to Hazel Pitchers, director at BlackRock.

"Pensions are not seen as particularly flexible and many do not know they are portable so we do need to improve how we communicate the benefits of pensions among employee schemes," said Pitchers.

Among the comments made by participants was recognition that basic information needs are not being met, so most individuals are unaware of the need to keep increasing their contributions over time or check their savings are on target to meet their retirement needs.

At the same time, many individuals said they simply want to be told "you are this age - this is how much you need to live on [at retirement] and what you need to do about it", rather than receive a regular statement because "nobody understands pensions unless they work in that sector".

Younger participants did, however, reveal they tended to be spurred on to sign up to a company pension scheme straight away by their parents or were unlikely to do so as daily living costs took precedence, according to the BlackRock retirement study.

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