Consequently, millennials are less likely to own property than the baby boomers, so will probably have higher housing-related expenses on retirement. Of course, as the panel’s chair – Peter Elliott, Legal & General’s head of marketing – pointed out, millennials are poised to inherit the wealth accumulated by their parents.
But in many cases, that may not be enough to ensure millennials are able to retire comfortably, especially with the shift from defined benefit schemes to defined contribution schemes. “The onus is on individuals to take accountability for ensuring they have large enough nest eggs when they retire,” said McQueen.
Encouragingly, the evidence suggests that millennials are actually leading adoption when it comes to auto-enrolment. McQueen pointed out that this should make them fertile hunting ground for providers of pension products, especially as millennials are considered to be the best-educated generation and like to be in control of their investment decisions. But for this to happen, millennials need to be engaged with the industry on pensions.
How can marketers engage with millennials on pensions?
All the panelists agreed that pensions have had bad press, thanks to incidents such as the BHS scandal. The panel also agreed that the general lack of transparency in the financial services industry can put off investors. According to panelist Andrew Moffit, managing director of Ferrier Pearce Creative Group, one reason for the lack of transparency is that the language used by most people in the industry is “un-understandable”, a factor that inhibits trust.
Eschewing jargon can be one step to increase transparency, as can educating investors. One example of a firm that’s done this successfully is Schroders, which recently launched a financial education website to explain investing to millennials in simple language.
But Moffit pointed out that education isn’t enough to change people’s behaviour. It is also important, said Lauren Peacock, campaigns organiser at ShareAction, for providers to be more transparent about the pension products they offer, like Norway’s government pension fund does. Nor is it sufficient to just provide information that meets legal and regulatory requirements; the industry must look to engage dynamically with investors, Moffitt said.
This can make millennials keener to invest, while also offering a way for pension providers to differentiate themselves by demonstrating wider value – an important characteristic in an industry where product differentiation is so difficult.