Key points
Methods should be the same for both men and women as, contrary to popular belief, research shows there are few disparities between how they respond, writes Kim Kaveh.
When it comes to communication, 'men are from Mars, and women are from Venus' - according to author John Gray whose famous 1992 book argued there are fundamental psychological differences between the sexes.
This is a bold assumption, and it is arguable the same conclusion has been drawn in the world of pensions.
The People's Pension director of policy Darren Philp says it is clear there is a common belief that women are more risk averse, and therefore more likely to respond to negative pension messaging.
"This is especially the case when it comes to investment risk and investment appetite, for example, as the way financial services communicate with members has been particularly masculine.
"For example, saying 'it's good to take risks' is rather bullish, and despite the perception that men and women are from different planets, when it comes to communication, I think we all need to be grounded on planet earth."
Busting the myth
The People's Pension (TPT) and State Street Global Advisors (SSGA) recently conducted a survey to test out the theory that men communicate differently to women, and published the results in a report titled Gender, Age and Pension Savings.
The research conducted in mid-July assessed how 1,255 men and women from the age of 18 to 75 plus responded to messages, and found the attitudes and responses to five positive and negative messages were similar for both sexes.
For example, based on a point score system between -0.6 and 1.2, among 18 to 24-year-olds, males scored 0.59 to one of the positive messages displayed, and females scored 0.63.
Meanwhile, for prevention-focused messages, among 18 to 24-year-olds, males scored 0.10 in response to a negative message, while females scored 0.13.
The research used the Regulatory Focus Theory - which states people view the world in these two modes:
Prevention focused - where people act on the basis of avoiding fear, or promotion focused - where people act with the goal of achieving gain.
Philp says: "When we tested that online with people, the results were surprising, because we actually thought there would be a gender story there, and there wasn't."
The aim was to establish whether the industry has an opportunity to better tailor and focus messages to both genders in the same way - and based on the results, it is clear promotional-based messages should be used for all.
However, schemes must know how to do this effectively.
Behave London director Hannah Lewis, who authored the report, says: "The research indicates the industry must be very careful when listening to just the words people use to describe how they feel."
Similar responses
She also says schemes could use the results to find out what really drives behaviour.
"The next phase would be to measure whether we can boost savings using our findings, by testing on scheme members."
The study also found when respondents were asked how they felt about pension savings on a scale from sad (one) to happy (nine), males scored 5.34, and females scored 4.80.
Meanwhile, when testing how they felt on a scale from calm (one) to nervous (nine), females only reported slightly more nervous feelings about pensions (3.99) than their male counterparts (3.66).
Philp says there is a fair amount of doom and gloom around pensions.
"For example, hearing about people losing their pensions and having to wait longer for the state pension gives people a negative impression."
"People read and respond to messages in different ways and I think when schemes and providers communicate to people they need to think about the behavioural response they would want from members, but positivity wins here."
It is also important to ensure messages are jargon free, natural, friendly, and pass literacy age tests.
The SSGA and TPP analysis found based on a score between one and five, the average female financial literacy score was 2.80, while males scored 3.34, which suggests there is room for improvement for both genders.
Lewis says words and pictures that have negative connotations should be matched with more rounded explanations.
"People are bad at absolutes, and very good at ratio, so schemes need to demonstrate things visually."
Aegon head of pensions Kate Smith adds that people do want a good quality of life so saving now would result in a good quality of life later on.
"We should keep nudging people and reminding them of that.
"There's a lot more we can do in this 'digital media age' by breaking down messages and save off images and videos and all sort of things to encourage people."
It is clear SGGA and TPP's analysis has shattered the stereotype that men and women are from ‘different planets.' But just being aware of this knowledge is not going to ensure members develop good savings habits.
Schemes must now take this information, and ensure the same positive language is being used to communicate pensions to both sexes, as well as ensuring financial literacy is improved.
