As we approach our next Masterclass, speakers Becky O’Connor, Director of Public Affairs, PensionBee and Clare Reilly, Chief Engagement Officer, PensionBee, discuss the challenges of positively selling risk to a younger, less informed audience and explain why financial journalists should understand current investment plans and strategies behind pensions to inform their coverage of the proposed Mansion House reforms.

Can you give a quick overview of what your Masterclass session will cover?

The investment plans behind pensions: what their strategies are and why; an explanation of ‘lifestying’ or ‘desrisking’; performance/ risk trade-offs; sequencing risk - how when you start a pension and when you start to access it affects your overall returns; who pensions are managed by, ultimately - the links in the pension supply chain;  investment pathways; value for money;  summary of  typical holdings; ‘what’s in a pension?’ myth-busting; the future of investment plans - values-based plans, more choice, more ‘pathways’.

What are the challenges surrounding your topic you would like journalists to help their readers understand? How will you be discussing this at the Masterclass?

A lack of understanding that pensions are investments, that these investments are managed according to a set of assumptions about individuals, and are beholden to the stock market to greater and less extents; between default plans, there is a large degree of homogeneity of underlying investments, so how do people choose what is a good pension? Many younger savers choose cautiously managed plans when they should be going for growth - how does the industry positively sell risk to a younger, less informed audience? And finally, the Mansion House reforms - a 5% allocation of big pension plans to UK private equity is coming - understanding how pensions are invested currently can help inform analysis of the impact of Mansion House.

Any general tips for money writers covering your sector?

Pensions are investments and responsibility for them falls on the individual, but individual pension savers are generally ill-equipped to take this on for themselves. Engagement and understanding of pensions helps to boost contribution levels, so in helping people improve their retirement outlook, lifting the lid on pensions is an important exercise. It can also help people contextualise and tolerate dips in performance, which inevitably many have experienced since the beginning of 2022. Avoiding panic through greater understanding of how pensions work is a worthwhile exercise.

What would you like to change about how journalists cover your area of expertise?

More clearly delineating the type of pensions being discussed in stories, ie. defined benefit/ defined contribution, workplace/ personal would be helpful but also covering pensions from a younger worker’s perspective - helping to shift the narrative away from pensions being an old person’s concern to something to think about from early adulthood.

Tell us about the big stories in your sector in the past few months

Mansion house reforms proposed by the Chancellor to allocate a higher proportion of pension funds to UK private equity - this is hotly debated and may not ultimately be in the best interests of pension savers; allocation to fossil fuels within UK pensions; extension of auto-enrolment to 18 year olds; Adequacy of private pension pots

Finally, why is it important for journalists to have access to initiatives such as Headlinemoney Masterclasses?

The Masterclasses are a chance to fill knowledge gaps, but also to consolidate areas of knowledge that may be thin, or dated. They are a good chance to get a fresh perspective on issues and new story angles that might be relevant to your audience. They’re a chance to connect with experts who can be good contacts for the long-term and help with stories on these themes. 

Becky O’Connor, Director of Public Affairs, PensionBee and Clare Reilly, Chief Engagement Officer, PensionBee will be speaking at the upcoming Headlinemoney Masterclass on 31 October 2023, along with experts from three other financial services companies, giving succinct overviews of their sectors for financial journalists. Find out more and book a place.