Twenty-nine per cent of pension savers said they would invest more into their pension if they knew the Financial Services Compensation Scheme (FSCS) protected it, new research has revealed.
The research by Populus, on behalf of the FSCS, found that on average each person within this group would invest a further £1,493 each year. Of those who said they would not invest more, the most common reason was that they do not have any spare money to put into their pension fund.
The research also looked at why consumers would invest more in a pension provider that prominently communicates the available FSCS protection. The findings show that 80 per cent of respondents would feel “more reassured” by a pension provider that prominently communicates the fact that its products are FSCS protected.
Consumers were asked about the best ways that their pension provider could promote the FSCS protection. Two-thirds (66 per cent) think that this information should be promoted on their annual statement and there was also support (37 per cent) for it being communicated via their employer/employer’s HR department. Just under a third (31 per cent) said the provider should highlight the FSCS protection on its website.
Commenting, FSCS chief executive Mark Neale said: “We have seen with our work in the deposit sector just how important FSCS protection is in reassuring consumers and increasing their trust in financial institutions. This research suggests that more prominent promotion of FSCS can have a similar impact in benefiting both consumers and providers in the pension sector. People will save more if they are confident their pension fund is safe and firms in turn will see reputational benefits if they prominently promote the available protection.
“In March 2018 we launched a group, representing leading firms in the advisory and wider life and pensions sectors, which is working together to look at developing an industry best practice standard for disclosure. This group will offer a benchmark on how life and pension product providers convey information about FSCS to consumers. Today’s research makes clear the benefits that doing this will have for everyone, and we look forward to continuing to work with the group to ensure these gains can be realised.”
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