We need to make sure Brexit doesn’t lead to a generation of quitters, says Sara Benwell

I received a text message from a friend yesterday. It read: “How are pensions? I’ve vigorously not checked mine since Brexit’.

For once, I was relieved by his pensions ambivalence. One truism of long-term savings is that the younger you are, the more risk tolerance you can (and arguably should) have. Volatility, over time, yields better results, and the young can afford to take more risk in the quest for better returns.

Brexit

But for first time savers, volatility can be frightening. And to log into your pensions portal (or more likely open your most recent paper statement) only to see that the value of your investments has halved would undoubtedly be daunting.

One real tragedy of Brexit would be if young people, more switched on to pensions than ever before, found themselves put off the whole idea of long-term savings due to poor results. Young people aren’t saving enough as it is, and I suspect it wouldn’t take much to convince people to opt out and bolster their pay packets instead.

DC schemes, mastertrusts and HR directors have a conundrum”

And there’s no doubt that the ongoing Brexit chaos will continue to impact investments. Every time another cabinet member resigns (and we’ve been promised one a day till recess), or negotiations with Europe fall down, the pound takes a nose dive and we see sharp movements in the FTSE 100 and 250. Not to mention what the impacts could be if we end up heading for ’no deal’.

How a young saver’s portfolio is doing could very much depend on what time or day of the week they are checking it.

In some respects, we are fortunate that young people tend not to check their pensions terribly often. But with share price volatility dominating the headlines it would come as no great surprise if Brexit was the prompt to change the habits of a (relatively short) lifetime.

This means that DC schemes, mastertrusts and HR directors have a conundrum. Do they talk to savers about their finances and risk more people paying attention, or do they leave it alone and hope that no one is looking anyway.

Communications need to be clear, concise and reassuring”

This is particularly tricky when communicating with younger savers, many of whom didn’t vote for Brexit in the first place. Pointing out that one outcome of the referendum result is that their pensions have fallen in value, may only add fuel to the fire.

In my view, communicating is better than not, but it needs to be done carefully. Schemes must find a way of explaining to members that while their investments may have fallen, in the next half a century before retirement they will recoup any losses.

Communications need to be clear, concise and reassuring. And they need to be soon. After all, if schemes leave it too late, their members could already be running for the hills.

Hoping that people fail to engage can no longer be an option.

Quietroom’s top tips for Brexit communications

1 – Write regularly. If members don’t know when they’re next going to hear news, then rumour, misinformation and fear will spread. So set up a regular newsletter – weekly, fortnightly, or monthly. Even if there’s been little change since the last newsletter, write and tell people that.

2 – Invite questions and answer them. If one person has a tricky question, there’s a good chance that hundreds of other people are worrying about the same thing. So gather them, answer the person who asked them and, where appropriate, make the question and answer available to others.

3 – Agree a core story and stick to it. When things are in a state of flux, there are often lots of different versions of events. HR tell their version of events on the website, the chief executive says something else to the press and the pensions team tell a third version in emails. Get together and agree what the order of events is, why things happened, what you’re going to do in response and what the timelines are.

4 – Make sure members know who their trustees are. Don’t wait until there’s a problem to introduce them. Do it now. People don’t need to know the biographies of each individual. They just need to know where they’re from and what their responsibilities are.

5 – Segment your messages. Make it very easy for each member to find what’s relevant to them. If different groups will be affected in different ways, tailor letters and emails, so they’re right for each group. And populate letters and emails with figures that apply to that member if you can.

6 – Meet members face to face. If you can arrange town-hall style meetings, where people can come and meet you, do. It not only gets people asking questions, but it shows that you want to engage with them. Not everyone will be able to make meetings, so make videos of your presentations, trustees’ views, and members’ reactions, and put them on your intranet.

7 – Find your champions. There will be people who are in touch with lots of members and can help spread your messages, scotch rumours and calm tempers. Talk to them and bring them on board.

8 – Talk like a human being. Good communication is never more important than when people feel out of their depth and are worried about the future. Use words that resonate (‘help’ not ‘assist’). Write short sentences. Use lots of pronouns (‘you’ and ‘we’) to make your communication easy for people to understand and respond to.