Why Email is the Missing Link in Pension Engagement

The Digital Reality

We live in an age where digital communication is a big part of everyday life. On average over 98 per cent of UK adults own a mobile phone, 96 per cent have regular access to the internet and 95 per cent have a personal email address.

The pensions industry has made great progress in member engagement using digital member portals. They are a great way to access pension data and keep personal information current. Most people are used to portals: they have them for council tax, energy suppliers, savings accounts as well as online shopping, entertainment and other services.

The Portal Problem

In fact, the average number of portals a consumer has access to is 119. But this ubiquity causes significant problems.

As good as portals are, consumers struggle to remember how to access them, what their login details are, and even what portals they have. It is simply not feasible for consumers to interact with all their portals regularly. As a result, many organisations choose to use email as a primary means of communication.

Email as the Engagement Bridge

Outbound email is a vital tool in ensuring members engage and make best use of the pension portals schemes have invested so much time and money developing. Emails might provide information requiring no response, but can also be used to contact members to encourage them to access their portal and take action.

Case Study: Midlands Pension Trust After implementing a quarterly email program in 2023, the Midlands Pension Trust saw portal logins increase by 43% and member data updates rise by 27% compared to their previous paper-only approach. The cost per engagement dropped by 68%, providing both better outcomes and higher ROI.

The Current State of Pension Communications

Pension schemes are slowly switching to email communications, but are a long way behind financial services in the broader sense. Many schemes are still wedded to paper-based communications, which can be significantly more expensive and lead to much lower levels of engagement. While direct mail response rates typically hover around 1-3%, well-crafted pension emails often achieve open rates of 35-45% with click-through rates of 5-8%.

Whilst people receive many unwanted emails, some of which are nefarious in nature, a well-crafted email from a pension provider will generally be well received.

Addressing Common Concerns

Email Address Availability

A barrier to using emails is that pension schemes often do not hold high volumes of member email addresses, and where they do have records, they are often work email addresses, which are likely to be out of date for deferred and pensioner members. However, there are reliable

services available that can append and update email records with success rates of up to 70% for active members.

Security and Confidentiality

It is understandable that there may be some concerns around confidentiality when using emails, although there are services available that ensure only the intended recipient can access the email content and, of course, highly sensitive information can be safely accessed via a portal.

Many providers now use secure delivery methods combined with multi-factor authentication. These security features can actually increase member confidence when properly explained, with members seeing these measures as evidence that their pension provider takes data protection seriously.

Digital Exclusion Myths

The fear that email communication excludes older people is largely unfounded. According to Age UK, 85 per cent of over 65s can use email, as can 77 per cent of over 75s. Schemes need to be conscious of vulnerable members of all ages, who might need paper communications, but that’s not a reason to avoid digital as a strategy.

Creating Effective Email Communications

Timing is Everything

Beyond the practicalities of sending emails, to be effective they need to be tim ely and relevant. Communications coinciding with significant life or career moments tend to resonate more strongly than generic updates. For example:

· Job changes/promotions

· Milestone birthdays (45, 50, 55)

· Annual review periods

· Legislative changes affecting pensions

Content and Design Principles

While many people experience email fatigue in their daily lives, scheme members typically appreciate measured, relevant updates about their pension savings, particularly when these help them understand complex information or prompt them to take beneficial actions.

Emails are also more likely to be effective if they are visually attractive and easy to read. If something is easy on the eye, the reader is more likely to engage with it. And if the way it’s worded is easy to understand, the reader is more likely to keep reading.

Straightforward language also builds trust, people tend to trust those who ‘sound like me’, rather than those who bamboozle with formal or complex vocabulary.

Security as a Trust Builder

Security measures, often seen as a potential barrier to digital engagement, can actually enhance members’ confidence when properly implemented and explained. Members who

understand how their information is being protected, and who have control over their communication preferences, are more likely to engage with digital services.

Frequency and Focus

It can be effective to combine educational content with a specific call to action. And members almost universally prefer communications to be little and often rather than a lot once a year.

Regular, digestible updates help members build understanding of their benefits over time, while clear prompts encourage them to take necessary actions. Again, this kind of approach is much easier, and cost effective, with email than with printed communications.

Getting Started with Email Communications

For pension schemes looking to transition to email communications:

1. Begin building your email database now, even if implementation is months away

2. Consider using a trusted third-party email address verification service

3. Start small with a pilot campaign to a segment of members

4. Measure results carefully and adapt your approach

5. Create a content calendar that mixes educational content with specific calls to action

6. Develop a style guide emphasizing plain language and visual clarity

Making the shift to email-centered communications may require initial investment, but the long-term benefits in engagement, cost savings, and member outcomes make a compelling case for pension schemes to embrace this digital bridge.