We examine whether targeted support communications influence how consumers make decisions relating to their pensions.
Read the Research Note (PDF)[1]
Many people are missing out on advice and support that could help them better manage their finances. As part of the Advice Guidance Boundary Review[3], the FCA is proposing a new approach called targeted support to help narrow the gap between advice and guidance. This allows authorised firms to use limited information to offer appropriate suggestions to consumers who share similar high-level characteristics.
To test how consumers respond to targeted support communications for pensions, we conducted behavioural research with consumers. This research explores how consumers respond to communications about targeted support in the context of two pensions decisions:
- Deciding whether to increase contributions to a pension (Contribution experiment), and
- Deciding how to access a pension (Decumulation experiment).
Specifically, we examined whether additional information – like details about the targeted support suggestion (also referred to as a ‘ready-made suggestion’) and how it was generated – can improve:
- Understanding of targeted support.
- Uptake of the targeted support suggestion.
- Confidence in decision-making.
- Sentiment towards the targeted support suggestion.
This Research Note investigates targeted support communications for pensions. We also investigated targeted support communications for retail investments[4]. These experiments were independently designed with results reported separately. Further interpretation of the policy implications of this research, taken together with the research on retail investments, are included in the Annex (8) to CP25/17[5], ‘Lessons from behavioural testing for targeted support’.
Authors
Rhosyn Almond, Lucy Hayes, Isaac Keeley, Mia Mayixuan Li, Bridie Meakin, Emily Morris, Krishane Patel, Manasi Phadnis
Disclaimer
Research notes contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that research notes contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.