How a pension can cater for the dimensions of diversity

Our Senior Director of Strategic Delivery, Eve Read, with a personal and professional reflection

How a pension can cater for the dimensions of diversity

I was recently invited to speak at a Hymans Robertson webinar that discussed Diversity, Equity and Inclusion (DE&I) in the master trust pension marketplace. Some of the numbers that came up during the webinar were quite alarming, yet at the same time they sadly didn’t surprise me. For example, the average minority ethnic saver has a pension pot of £52,333, just 46% the size of their white British counterpart’s £114,941*. 

Hymans Robertson’s own research stated that 100% of master trusts have a DE&I policy, but don’t be fooled – how many pension providers do more than simply having a policy and can show that they actually back it up with meaningful actions?

The topic of DE&I has grown significantly in recent years, and various initiatives have been put in place. That’s all good news, of course. However, I think there’s more work that can be done. 

What does DE&I mean to me? 

Naturally, our own individual perspectives and experiences in life dictate that there are some sectors of the population that we’ll find it much easier to relate to than others. 

I’m a white female, from a lower middle class background, and mum to two children. That means that my own focus, professionally, is on how we help working class and lower middle class groups, who are more likely to be underserved in pension provision and may often be less financially confident, too. I’m passionate about helping them save for retirement and giving them a better understanding of broader financial matters – two things that I didn’t understand well.

Additionally, I’m committed to helping to close the gender pension gap. It’s something that’s been a concern of mine since long before I joined Smart Pension. Naturally, there’s no simple fix – the impacts of maternity and caring leave, childcare costs, returning to work on a part-time basis and lower confidence in investing are all factors that make it harder for women to save as much for retirement as men.

Equally, though, it’s important for all of us in the pension marketplace to have the input of groups that we don’t have personal or professional experience of – only then can we understand their concerns and help them to achieve better financial and personal outcomes. 

To use a personal example, in my own household there’s a dimension of diversity that we’ve worked through. My daughter and husband both have ADHD, a form of neurodiversity. I understand that my daughter thinks, processes information and learns in ways that are different from how I do those things, and I’ve had to educate myself and modify how I interact with her, particularly in relation to supporting and coaching her with her learning. There are so many different dimensions of diversity that none of us can fully understand, and it’s why I feel passionate about doing all I can to help pension scheme members across these dimensions.

Examples of our DE&I policy in action at Smart Pension

We do a lot at Smart Pension to make sure our master trust caters for the dimensions of diversity of its members. As a pension scheme provider, we may be digital-first but we’re not digital-only, and we’re proud to have a UK-based Member Support Team, there to help all members and make a difference with any groups who need special or extra assistance. 

A lot of time is spent in training so that our agents keep things as simple as possible in the terms they use when talking to members about pensions – and make discussing saving for retirement easily understandable. Having a UK-based support team helps us identify any vulnerabilities at an early stage in a telephone call. It also means we can offer personalised and tailored support, based on an individual member’s own needs.

An industry first – the Halal Workplace Pension

We’ve recently announced that we’re the first major master trust to offer a fully diversified halal workplace pension. This breaks new ground in addressing the unmet need for modern Shariah-compliant pensions amongst Muslim employers and the UK’s 3.9 million Muslim population. 

The new offering adheres to Shariah principles and offers a managed investment glidepath as the default investment option. Existing Shariah-compliant pension offerings from large master trusts are single equity funds that members have to actively select, and feature no risk management in the run-up to retirement age, unlike non Shariah-compliant default funds. 

The reason this is really important is that when it comes to pension provision, the Muslim population has been underserved. In 2021 the Office for National Statistics found that 84.5% of Muslims in the UK were 50 or under, compared to 62% of the overall population. However, one third of Muslim employees don’t have a workplace pension, with 78% citing concerns around Shariah compliance. Read more.

Personally, I feel like we’re doing something really worthwhile here. We’re opening up pension saving for as many people as possible which is what workplace pensions should be all about. 

*Source: Legal & General’s ethnicity pension gap report 

About Smart Pension

Launched in 2015, Smart Pension exceeds £5bn in assets under management (AUM) and now serves over one million members and more than 70,000 employers. It is powered by Keystone, Smart’s global savings and investments technology platform.

Aquiline Capital Partners, Barclays, Chrysalis Investments, DWS Group, Fidelity International Strategic Ventures, J.P. Morgan, Legal & General Investment Management, Link Group and Natixis Investment Managers are all investors in Smart Pension.