Background

Nest (National Employer Savings Trust) – the UK’s largest defined contribution workplace pension scheme – will be introducing a new product to address the Pension Freedom and Choice Act 2015. Pensions research was required to align the new product with members’ aspirations. The key objectives were to understand acceptable levels of risk for Nest members and their preferences in terms of potential lump sums, whilst quantifying findings and identifying member segments.

Approach

Together with PJM Economics, we developed a Choice Experiment questionnaire. The project had two main stages – cognitive testing followed by a quantitative, online phase amongst over 4,000 members.

The cognitive testing phase helped us identify and refine the layout of the choice experiments to ensure the final survey was both user-friendly and would provide us with the required data. The second stage was incentivised, with members invited to the survey via email. The survey was hosted by Accent, using our proprietary survey software.

Results

The project has helped Nest better understand their members’ attitudes to retirement income and retirement income volatility. This pensions research has also highlighted the varying attitudes of different subgroups such as older and younger age groups and risk averse members. The findings are being used to set the levels for two core elements of the new product.