"People know already that retirement is important"

Published on: 24 August 2020

Blikken van Buiten (Looking in from the Outside)  

We all know we should make sure we have “an income for later”. But that doesn’t mean we will do something about it today. Because we might not feel like it, it’s too abstract, too complicated. How can we make the idea of a future pension exciting? In the series “Blikken van Buiten” (Looking in from the Outside), psychologists, behavioral scientists and marketers take a fresh look at the pitfalls, opportunities and challenges.

Episode 1: Professor of Behavioral Change and Society at the Radboud University, Rick van Baaren.


Behavioral scientists Rick van Baaren about the senselessness of “sensible messages”


If there’s one thing that Professor of Behavioral Change and Society, Rick van Baaren knows for sure, it is that people are rarely convinced by rational arguments. And they certainly do not inspire action. His advice to pension providers is therefore short and to the point: “Stop using rational arguments when reaching out to people.”


“What I often see pension providers do is to send very clear and sensible messages that basically boil down to: Attention people: your pension is important. In the hope that people will think: ‘Right, it’s true: my pension is important. I’m going to find out more about it right now.’ But it doesn’t work that way.”


Why not?

“You’re not telling them anything new. People already know that having a retirement plan in place is important. And they know they should look into it more. Just like they know that smoking and eating junk food are not good for you. But just knowing it doesn’t mean you will act accordingly. The pension provider’s strategy is still often: if we impress upon people that setting up a pension plan is important often enough, sooner or later the penny will drop. But this is not the case. At most you’re telling people something they already agree with. That doesn’t make them take action. And that’s the problem with many SIRE campaigns too.”



“Most people don’t want to worry about the future”



Those are doing quite well, aren’t they?

“Yes, they appeal to many people. Because they are often saying something that we all agree with already. For example, if you say: it’s wrong to attack emergency workers, many people who never attack emergency workers will think: ‘Yes, obviously!’ But a campaign like that will not ensure that people who, in certain situations would attack an ambulance will suddenly, in the heat of the moment, think: ‘Oh no, it’s wrong to attack emergency workers. I’d better not do it’.”


So, what does work?

“It starts with doing your homework. If you want to change people’s behavior – and that is what pensions providers want to do – a thorough analysis must be conducted first. Summarized, this means: what is the target behavior? What is the problem behavior? And then you have to look at: where is that problem behavior coming from? What is perpetuating it? What are the resistances that prevent people from showing the target behavior? Only when you know what those resistances are can you try to eliminate them. And when it comes to pension plans, unfortunately, there are many.”


Such as?

“The subject of retirement means ‘later’ for many people and therefore ‘far away’.  Plus, it is something abstract, it is difficult, and for many people it is lacking urgency. On top of that, there is the phenomenon of ‘optimistic bias’; in other words, people overestimate the chance of positive events and underestimate the chance of negative events happening to themselves. This allows people not to worry about the future. Altogether, that’s quite a few resistances. You might say: when it comes to behavioral change, the pension sector has pretty much everything going against it.”



“When it comes to behavioral change, the pension sector has pretty much everything going against it”



So, now what?

“This does not mean you can’t eliminate those resistances. But pension providers really need to examine their target groups – even better than they are undoubtedly doing now. Who do I want to address? What occupies their minds? What worries them? What appeals to them? What kind of resistance to figuring out their retirement plans do they experience? And most of all: how is this resistance expressed? Because that is going to be different for different people and different target groups.”


What are those differences?

“We basically distinguish three types of resistance: reactance (defiance), skepticism, and inertia, (passivity). When there is reactance, people feel threatened in their autonomy, which makes them feel defiant. Then you have to invest in trust. Skepticism comes from uncertainty and is created by, for example, fear of change or not understanding the material. Then you have to create accessibility and clarity. Inertia is the most challenging resistance: people are willing, but they take no action. Then you have to find some way to create action and commitment. And you can’t really tackle any of this until you know what type of resistance you’re dealing with in your specific target group. The tricky part is: when it comes to retirement, a combination of all three of these types of resistance plays a role.”


What is the solution?

“First of all: you must realize that there is no quick fix. An informative website is not going to make any difference. Pension providers are going to have to really delve into the behavioral issue and conduct thorough analyses of all their various target groups to come up with good solutions. You can’t just improvise on that. It takes time, money and energy, but in the end it’s worth it. Because once you know how to motivate your target group, all kinds of really good, creative applications become possible.”



“Once you know how to motivate your target group, all kinds of really good, creative applications become possible”



Can you give an example?

“Organ donorship is one of the themes that, just like retirement and pension plans, has to deal with all the different types of resistance. Yet, Brazil succeeded in drastically increasing the number of organ donors through a very special campaign. They capitalized on the deep love Brazilians have for their soccer club. The campaign used the idea that you can become immortal and that your love for your soccer club can live on in someone else. Donating your organs as a way to become immortal; just as immortal as your love for your club. In the first year of the campaign, the waiting list decreased to virtually zero. This is a great example of overcoming inertia by creating commitment. People knew rationally that donating organs is important, but now they had a feeling to go with that, a drive that inspired them to action. And that makes all the difference.”