In the past year the coronavirus pandemic has permanently changed the way we live our lives.
The pension sector has been affected by this rapid transformation, but rather than succumb to the negatives, these changes could pave the way towards a more positive future.
Working from home is now the norm, and workplaces need to adapt to the variations in people’s lives. From home schooling to dogs barking, we’re gaining a greater insight into the lives of our colleagues, clients and members. Almost overnight the pensions industry has shifted its staff to a home working environment, with Capita making it possible for 1,800 pensions staff to work from home in March last year. As we catch these glimpses into real life, we’re understanding the importance of mental health initiatives and checking in on those around us. Whether people are working from a sofa in a house share or have their own office garden pod, we’re more mindful of people’s circumstances, and more willing to adapt to their needs as a result. We’ve seen people realign their priorities, develop closer bonds with family members and evaluate what it is they really want from their careers and lives. Location-specific jobs are declining, and we’re learning more about people’s hobbies, interests and life balance. Expectations are being reset and it’s time we aligned the pensions industry with these changes, embracing the new dynamic.
Traditionally the pensions industry has operated best in a stable environment. Yet despite the challenges of the past 12 months, we’ve risen to the occasion. Digital connections have remained strong, and we’ve relied on the excellent communication skills of the people working in our industry to keep the cogs moving smoothly.
For decades the pension industry has been wrapped by longevity, regulations and legislation. While it’s important to maintain the levels of quality we’ve been used to delivering, there’s also room for new innovation and ideas. It’s been rumoured that tax relief changes will be arriving soon, while the changing nature of people’s careers will also have an impact of people’s investment plans. In addition to a rise in gig economy jobs, we know that younger people are likely to change not just jobs but entire careers more frequently. Traditionally it’s been hard to consolidate pensions from different jobs because it involved extensive paperwork which demonstrates that there’s room to modernise pension plans in line with people’s needs, making make it easier for them to consolidate their contributions.
Until 2010, the pensions sector was a reactive industry. But in the modern climate we need to dig deeper to pre-empt challenges and market expectations. Putting in place the tools to properly understand data, trends and insights will help us enormously. By using this information in line with GDPR guidelines, we can dig beneath the surface of demand, to find out what drives consumers and how our products can better reflect their needs.
To deliver our goals by 2025, the pensions industry needs to remain focused on some key areas. Firstly, a digital first approach is required for administration services, supported by automation as well as high quality data. Pension dashboards allow a simple solution for ensuring that people can see their lifetime savings in one place, but these interfaces alone are not enough to support individuals. In order to succeed, we’ll need to combine advances in technology and tools with education. If people don’t fully understand the information or the impact of their contributions, a high-quality dashboard won’t solve the issues of complexity we have in the industry.
As society moves towards a more sustainable way of living, the pensions industry must keep up. In the past year we’ve had the opportunity to examine some of our pre-Covid behaviours and many of these changes, for example reduction of unnecessary travel, are likely to stay. Meanwhile we must ensure that the investments we are making are sustainable and that this information is communicated back to customers. In addition to ensuring that we move towards creating a carbon neutral business, supporting local communities is more important than ever. After a year at home, people are more invested in ever in seeing their own communities grow and flourish. Demonstrating how people’s pension contributions can support this will be crucial.
Moving forward, we must co-create our products and services with clients and customers, to ensure we’re truly representative of the members we serve. The pensions industry should be helping people to make informed decisions, not just at retirement, but when they first join the schemes. We must be providing a holistic view of how pension contributions can be used throughout a person’s lifetime.
The pensions industry will need to collaborate to ensure that our aspirations become a reality in the next five years. By working together with staff, industry leaders, clients and customers, we can integrate pensions into people’s lives, offering them a strong user experience and investments that help them to meet their goals. As an industry we look forward to adapting to a post-lockdown world to deliver a bright future for both the sector and its clients.
This insight was developed on the back of our Future-proofing pensions conference. The event covered a range of topics from data and pensions admin, to the future sustainability of pensions.