30 Aug 2018 3 min read

Can we save ourselves from future money worries?

By Stuart Murphy

The introduction of auto-enrolment has led millions more to save into a pension. But is encouraging people to put more aside for the future the sole antidote to money worries? What if the worries themselves were stopping people saving?


We can all pat ourselves on the back. With nine million individuals being auto-enrolled since 2012 and nine out of ten of them still saving, the government’s recent statement that “We are rebuilding the UK’s savings culture” would appear to be justified.

But let’s not forget that we’re at the beginning of a long journey. Indeed, the government’s own automatic enrolment review concluded that current saving levels still risk many not meeting their retirement expectations and that engagement with pensions remains very low. The barriers to engagement are numerous. They include the emergence of the gig economy (meaning many are not included in pension schemes), the increasing price tag on property ownership and the lack of financial education in schools.

Some individuals may be affected by the ‘ostrich’ effect, keeping their heads buried in the sand and hoping the financial problems will go away

The impact of money worries on retirement saving should also not be overlooked. One in four employees report that money worries have affected their ability to do their job (according to the CIPD), while 40% feel they do not have good control of their money (Money Advice Service). Further evidence suggests that financial worries are a key cause of stress.

With statistics like this, it’s clear that money worries themselves might be causing people to save less than they otherwise might, thereby creating a vicious circle. While some individuals are comfortable dealing with day-to-day financial issues, others may be affected by the ‘ostrich’ effect, keeping their heads buried in the sand and hoping the problems will go away.

So what’s the answer? We believe the everyday integration of technology offers a fantastic opportunity to increase engagement, not just in retirement savings (the planned pensions dashboard for instance), but also in general financial wellbeing.

By launching technology portals providing online access to intuitive guidance, employers can help people to manage their finances and understand their attitude to money. The workplace also provides an ideal opportunity to address financial wellbeing. This is proven by the number of employers who are now putting in place wellbeing strategies for their staff.

The everyday integration of technology offers a fantastic opportunity to increase engagement

A word of warning though! It’s all well and good having a compelling online pensions portal, but individuals first need to be aware that it exists. Any campaign to take them there has to make it a ‘no brainer’, clearly articulating what the benefits are to the would-be saver. Only if providers offer both a sustained stream of informative and relevant financial content to employees, as well online tools, will traffic grow and behaviours change.

By using good content to help individuals to feel confident about their day-to-day finances, there could be a range of additional benefits, including reducing the amount of working hours lost to stress, helping individuals to manage debt effectively and putting them in a stronger position to start saving more for their retirement.

In this way, we can reduce the number of undersavers and help people be financially happy, both today and in the future.


For more on improving financial wellbeing, please see our recent Client Solutions article.

Stuart Murphy

Head of Client Platforms

Stuart is Head of Client Platforms at LGIM. His responsibilities include client management, client proposition, relationship management strategy and managing the support for the Legal & General Mastertrust and IGC, which includes chairing the Mastertrust Scheme Strategist Forum. Stuart has been with Legal & General for over 20 years, fulfilling a number of roles within the bundled DC business.

Stuart Murphy