Value for Money metrics can improve pension decisions
The research finds that VfM metrics significantly affect consumer decision-making, with different designs causing participants to focus on different aspects of pensions in their decision-making. The study highlights that there is a “sweet spot” in simplification: too much detail can overwhelm, while too little can reduce trust and worsen decision making. For example, consumers were better able to identify higher quality pensions when they were shown a 5-point RAG rating compared to a 3-point RAG rating.
People’s Pension has previously highlighted that the introduction of pensions dashboards will help consumers track their pensions, however, its research has shown how vulnerable people are in the decision-making process when transferring pensions, meaning the need for easy-to-understand metrics about the value of a product is vital.
The most recent findings follow previous research6 from People’s Pension and BIT, showing that cash incentives can result in consumers switching their pension to a poorer value option, ignoring the fine print and key information. This new research aimed to examine how consumers can be supported with better value for money metrics when it comes to their pension.
[....]
