Recent research into the pension gap showed that pension awareness has grown from 61 to 72 percent among the Dutch population in the past ten years. How can that increased awareness be explained? We asked Joyce Augustus-Vonken, researcher at APG Research.
It’s a well-known fact that not many people get excited when they hear the word “pensions”. Previous research by APG Research showed that people words like “grass” and “brick” evoked more positive emotions than words like “gross pension” and “coverage ratio”. Research by Wijzer in geldzaken (Dutch), however, found that pension awareness has risen by 11 percent in the past decade. This also raises the question of what has caused this increase in awareness.
Brick
Augustus believes there is no single factor that can be attributed to. “The study that compared people’s emotions when words like ‘brick’ were used to the feelings evoked by pension terms is now ten years behind us. In those years, the pension industry has become much more aware of the importance of good communication. It has come to realize that you should not overload participants with information. The sector recognizes the added value of layered and clear communication, and the focus has shifted from providing a lot of information to offering manageable, easy, and concrete pieces of information. And there is a big focus on digital information. We’ve been seeing an increase in the use of personal digital pension portals over the past decade.”
Life events
Moreover, when communicating about pensions today, Augustus says we consider how a participant subconsciously thinks and acts. “This includes, for example, the effect the words we use may have, the amount of information, and things like that. In addition, the industry has set itself the goal of activating participants to think more about their pensions - how they are doing and whether they will be enough later and about the effect of certain life events. Funds have often also set targets for this, so concrete actions are being taken. This will also have had a positive impact on pension awareness.”
Good news
Finally, we should also not discount the effect of all the interest surrounding the Dutch pension system change (the new Pension Act went into effect July 1, 2023). “The introduction of the renewed system will undoubtedly have played a role in increasing pension awareness. There has also been a lot of media coverage of the system change, especially in the past two years.”
The fact that pension awareness has increased in the Netherlands is, of course, great news. But in the pension sector, we look far beyond that, says Augustus. “The Wijzer in geldzaken survey shows, among other things, that pension awareness has increased. This was measured by asking whether people have started thinking more about it and whether they see its importance. Pension awareness is the starting point for building greater financial self-sufficiency and increasing confidence in pensions. If you want to help participants properly, you also need to take into account their knowledge and attitudes about retirement.”