The Pensions Hangover Rap

by Steve Sharp

Empowering Pensions: From Products to Outcomes

This week I spoke at a Financial Services conference which was snappily entitled Empowering Pensions: From Products to Outcomes.

Other speakers opined on the search for new products and services whilst some talked about digital wizardry, algorithms and financial engagement programmes. There was discussion about how to get younger people to understand pensions, how important they are in later life, and how to persuade them to commence or increase their contributions in troubled times.

I sensed some underlying frustration from the panels that the vast majority of the public just don’t want to look at the numbers and see what it all means for their futures. They don’t want to “engage” or be “empowered” or be persuaded by the facts.

Why? Because they are human beings with human emotions which dominate their thinking, and largely have an aversion to complex numbers and data.

Not everyone of course. It would appear that most of the people in the room came from that minority, which is why they are frustrated at the rest of us.

My own presentation suggested that it is not the need for more products or data that is the issue, (there is a vast and confusing array of products already) but rather how the pensions industry communicates with its audience, and to do that with empathy.

It went down rather well with lots of nodding from the delegates but I rather suspect that it was all forgotten by close of play.

There were two notable exceptions to the data and doom merchants.

One was a presenter called Samantha Gould who spends her time persuading marginalised groups to consider pensions. Ethnic minorities, self-employed, divorcees, single mothers…and women! Yes women, who on average have £137k less in their pension pots at retirement than men.

Her approach to engaging young people and ethnic minorities includes a film with rap artist Big Zuu, which is just brilliant.

I love the line “When I was a young dude sitting in detention, I never thought that I’d be talking about pensions. You got to pay your pension some attention.”

The other speaker talking my language was a psychologist Dr Simon Moore who reminded delegates that our brains’ Pre-Frontal Cortex, the bit that deals with numbers and logic is 10% and the rest of your grey matter, 90% is emotional.

He used several examples of how emotions, feelings, will always dominate logic and data but I especially liked this one:

He asked everyone to put up their hand if they had ever had a hangover. Everyone.

Then he asked to raise the other hand if you have had two hangovers. Everyone.

So, you didn’t learn from the first mistake because your emotions took over from logic.

How many of you were feeling pretty tipsy one time, and you thought you had better stop and just drink water, but just carried on and had several more drinks?

Everyone.

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