How online innovation can lead to a better retirement
With the busy and often stressful lives we lead today, it’s understandable that people put off considering what they will do when that last day at work arrives. Encouragements to start planning early, to save more for retirement and to worry about our future now, seem remote and difficult when the cost of living is escalating, pay is stagnant and the next holiday beckons. There is always a more important priority than making future plans it seems.
Helping connect the future to the present
To encourage us all to face the reality of retirement head-on, and the importance of consistent long-term saving, LifeSight has developed a personalised tool called the ageOmeter. It improves members’ understanding of what their pension savings can do for them, giving them the information and motivation they need to make sound pension decisions both as they prepare for retirement and how to make the most of what they have after they retire. The ageOmeter focuses on age rather than future money values to make pension savings more relevant and drive better engagement. The tool encourages timely pension planning using a metric that everyone can relate – the age at which they can afford to stop working.
Throughout the pre-retirement, or ‘savings’ phase, the ageOmeter educates users about when they may be able to afford to retire and how they can influence this through their contribution and investment decisions.
Then, once the member has entered the ‘spending’, or drawdown phase – if they choose to access their retirement benefits that way – the ageOmeter helps them determine how long their money will last, based on their current withdrawals and investment choices. The tool is a good example of how LifeSight helps members, improving engagement and communication through leveraging technology effectively.
The innovative, online, interactive software also helps members put all of their retirement savings together – for example, money from other schemes, other investments and their state pension – so that they have an overview of the bigger picture.
Giving Users Choice
LifeSight is built for the way we live today, giving members the ability to transact from the device of their choice irrespective of their location. This type of “always-on” pension scheme gives members much deeper involvement on a day-to-day basis when it comes to how much they have saved and when they might be able to retire. This is supported by interactive, personalised tools to engage the member with their pensions.
Recent analytics have shown that over 80% of employees have logged in to their LifeSight account within six months of joining and 70% of members who enter the ageOmeter tool follow the process to the end.
We also know from tracking members through the tool that members who begin the ageOmeter journey follow it through to the end.
Innovation Drives Engagement
Members of defined contribution schemes are responsible for their own retirement outcomes, so they need to be equipped with the latest tools that enable them to take control and make the right retirement planning decisions. A high level of consumer engagement with pensions is a key part of helping members get better outcomes. Traditional communication channels such as brochures and paper statements just don’t achieve this.
Even the best investment options and strategies are wasted unless members can understand and navigate their way around them. The new, personal approach that the ageOmeter offers delivers sustained engagement that people of all ages can relate to and is central to the LifeSight online experience. It educates members on the way they can influence the age at which they may be able to afford to take their pension savings (their ‘LifeSight Age’), through contribution, retirement and investment decisions.
A Personal Approach
Using age rather than potential future income as the focus for communicating retirement outcomes helps people digest complex pension information more easily, as it is a metric that everyone can relate to. Providing small amounts of personalised, easily accessible information, in the form of a user’s age, helps improve engagement of members with the important decisions they need to take as they save for retirement. It also helps them to understand what choices they can make to influence retirement outcomes, leading to more informed decisions and better pension outcomes.