Marketing Pensions to the Under 35s

Table of Contents

• Overview
  • Catalyst
  • Summary
• Executive Summary
  • The under 35s need to save for their future, however they are embracing debt
    • The strain on the first pillar will increase over the next 20 years
    • Most young people do not have a pension
  • The financial services industry is neglecting young customers
    • Advisors admit they are not actively targeting young clients however believe they are important to the future
  • Marketing within a mega trend framework can draw out new ideas
    • Datamonitor' s mega trend framework consists of 10 key consumer trends
      • The four complexity trends
      • The six behavioral trends
• Table of Contents
• Table of figures
• Table of tables
• Young People and their relationship with savings
  • The under 35s need to save for their future however they are embracing debt
    • The first pillar of pensions is under immense pressure
      • An ageing workforce will put pressure on young people to support retirees
      • The strain on the first pillar will increase over the next 20 years
    • Young people are not saving for the future, assuming that they will be looked after by the already buckling state system
    • Not only are young people not saving but their debt is increasing, leading to a spiral of low savings and rocketing credit
    • Most young people do not have a pension
      • Affordability is preventing pension saving
    • Young people need to start thinking early in their careers about building retirement savings
      • Those young people who are saving for their retirement still aren' t saving enough
  • Responsibility for shifting the attitudes of young people lies with the government and the industry
    • Young people need to be financially educated so that they do not rely on credit
      • Generally, the under 35s lack adequate financial education and skills
      • Educational charities would like to see personal finance as a compulsory subject taught in schools
      • A number of online websites have been launched to help educate young people about their finances
  • Government reforms will help individuals save for their retirement
    • It is proposed that all employers will be required to pay personal pension contributions to employees
    • The state pension age is set to increase for men and women from 65 to 68 by 2046
  • Providers are not targeting the long-term needs of the under 35s
    • The financial services industry is missing the opportunity to ' tap' into the young mass affluent market
      • Advisors admit they are not actively targeting young clients however believe they are important to the future
    • Banks are targeting under 35s in other market areas but are failing to offer long-term products
      • NatWest offers young clients face-to-face assistance when managing their finances
      • Lloyds TSB encourages individuals to start saving small in an innovative way
      • Halifax looked to radio marketing for the first time in 2007 to attract young customers to its banking services
• Targeted Marketing of Pensions to Under 35s
  • The financial services industry is neglecting young customers
  • Marketing within a mega trend framework can draw out new ideas
    • Datamonitor' s mega trend framework consists of ten key consumer trends
      • The four complexity trends
      • The six behavioral trends
  • Young people' s priorities are convenience and a feeling of connection
  • Connectivity
    • Connecting to the world and having a sense of belonging appeals to young people
  • Convenience
    • Young people are increasingly seeking a purchasing experience that is efficient so they have more leisure time
  • Health and wellness
    • Pensions can help young people look after their financial health of the future
  • Comfort
    • Under 35s are typically more risk seeking than wanting to feel comfortable
  • Sensory
    • Under 35s are focused on maximizing their current consumption pleasure
  • Individualism
    • Collective investments such as pensions are unlikely to be marketed as personalized consumer products
  • Life stage complexity
    • There is an opportunity to ' tap' into the under 35s market before they start a family and buy a home
  • Income complexity
    • Under 35s want to consume premium items and get value for money at the same time
  • Gender complexity
    • Women are increasingly looking to be financially independent
  • Age Complexity
    • Pensions are too often associated with the idea that it is a product only for middle-aged people
• APPENDIX
  • Definitions
    • Personal Pensions
  • Methodology
  • Ask the analyst
  • Datamonitor consulting
  • Further reading
• List of Tables
  • Table 1: Changes in population segments between 1981 and 2006
  • Table 2: Mega trend rankings of current market and potential market
  • Table 3: 82% of young people have never heard of SIPPs
  • Table 4: 82% of young people have never heard of SIPPs
  • Table 5: Only around 10% of 18-29 yr olds are saving the amount required for a £15k per year income in retirement
  • Table 6: 79% of 18-29 yr olds have no pension
  • Table 7: 43% of young say they have no pension because they lack any spare money
• List of Figures
  • Figure 1: 79% of 18-29 year olds have no pension
  • Figure 2: Pressure on the working age population is increasing as more people begin to retire
  • Figure 3: 79% of 18-29 year olds have no pension
  • Figure 4: 43% of the young say they have no pension because they lack any spare money
  • Figure 5: A significant saving per month can be made by starting to save earlier for retirement
  • Figure 6: Only around 10% of 18-29 year olds are saving the amount required for a £15k per year income in retirement
  • Figure 7: Moneymadeclear is a website launched by the FSA to help simplify financial products and services
  • Figure 8: The What Money Means program was launched by pfeg and HSBC to improve personal finance education in primary schools
  • Figure 9: Choosing and using provides online users with general advice on credit cards
  • Figure 10: By 2012 it is proposed that employees will have a minimum of 8% of their salary paid into a personal pension scheme
  • Figure 11: NatWest encourages graduates with business ideas to work with its business banking unit to develop their ideas
  • Figure 12: NatWest markets lending products at graduates rather than long-term saving and investment products
  • Figure 13: Lloyds TSB encourages young people to think about their monthly spending habits
  • Figure 14: Connectivity and convenience are considered the most marketable ways to promote pensions to under 35s
  • Figure 15: 82% of young people have never heard of SIPPs