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Diversity, equity and inclusion (DEI) in pensions: looking beyond the boardroom

Scottish Widows tells us about their three-pillar approach to diversity, equity and inclusion

The pensions industry often treats diversity, equity and inclusion (DEI) as a governance issue. Get more diverse boards, the thinking goes, and better outcomes will follow. But what if we’re missing the bigger picture?

At our recent Wednesday Wisdom webinar, Sharon Bellingham, Master Trust and IGC Lead at Scottish Widows, revealed a more ambitious approach – one that’s reshaping how the provider thinks about DEI.

Understanding the real challenge

Sharon considers DEI from a Master Trust perspective at Scottish Widows. And does so working with the Trustee board, the business, colleagues and parent company Lloyds Banking Group. While DEI has long been a point of focus for Scottish Widows, Sharon says the providers’ voyage into new DEI waters has only really just begun. And they’re making solid progress.

As a starting point, Sharon reasons that you need to think more broadly about what DEI means. This boils down to truly understanding who your members are. And the numbers tell a very compelling story:

What’s more, Sharon says that 25% of Scottish Widows’ pension customers are considered vulnerable. The top issue? Financial distress.

In an industry built around complex financial products and technical language, these statistics are a wake up call.

“We want to remove as much friction for our customers as we can.”

A framework for change

To tackle this, Sharon explains that Scottish Widows has developed a three-pillar approach. It can be used by any governance committee or trustee board looking to improve their DE&I framework.

1. Inclusive governance and behaviour
Instead of treating DEI as a standalone issue, embed it into every aspect of your decision-making. Allow it to help shape your policies, risk assessments, and daily operations.

2. Inclusive insight and design
Look to understand who your members are and design for their needs. Test products with real users and work with partners who understand specific challenges.

3. Inclusive support and experience
Think carefully about how members interact with your services and when they might need help. And pay extra attention to your vulnerable customers.

“DEI is heavily entrenched into how we go about our day to day activity and just runs through the DNA of our business.”

Overcoming DEI hurdles

Of course, there are challenges with implementing a new DEI strategy. But Sharon has some clever insights to help you on your way.

For master trusts, the challenge is complexity. With multiple employers and diverse workforces, how do you create systems that work for everyone? Sharon recommends continuous testing and adaptation.

For measuring success, it’s about looking beyond the obvious metrics. Scottish Widows tracks digital engagement, user journeys, and friction points, while also getting independent evaluation of their initiatives.

For design processes, it’s about bringing in diverse voices. Scottish Widows’ quarterly design panel includes both internal teams and external experts, ensuring they’re testing ideas with the right people.

Thinking beyond tick boxes

What’s really interesting is how the approach shifts the DEI focus from compliance to capability. And how DEI is fast becoming a fundamental cog in the well-oiled pension scheme machine.

But despite progress, huge challenges remain. Women’s pension pots still lag behind men’s by around £100,000 at retirement. Many members have less than 3 months’ emergency savings. Then there’s the question of how we reach younger savers – should we be venturing onto platforms like TikTok? As Sharon put it: “We’re not the finished article.”

True DEI isn’t about ticking boxes – it’s about understanding and supporting every member’s journey to a better retirement. As the pensions industry tackles adequacy and engagement challenges, putting DEI at the heart of everything isn’t just right, it’s essential for better outcomes.