This new groundbreaking study,which involved more than 5,000 UK pension savers, tested whether VfM metrics, similar to the Financial Conduct Authority’s (FCA) proposed industry-facing metrics, helped or hindered consumers when they were asked to compare different pension products.
The research demonstrates how simple metrics can help consumers better identify higher-value pension products when compared to a factsheet, the current status quo offered by pension providers.
The study consisted of an online randomised controlled trial where pension savers were randomly assigned to view one of four distinct VfM metric designs or a factsheet, which served as the control group. They were asked to shortlist three pensions from eight unbranded options and received a higher score for shortlisting better pension options.
The research shows that design metrics significantly impact consumer decision-making, with different designs causing participants to focus on different aspects of pensions in their decision-making. Some designs caused participants to cite underlying components such as investment performance, fees and service as key influences, aligning with the detailed breakdown they saw, but as granularity increased, they began to rely more on overall ratings and less on individual components when citing influences.
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