Picture versus text: what works better?
A picture says more than 100 words? The answer depends on the goal of pension communication. Should participants “like” what they see or should they be nudged to take action?
Picture versus text: what works better in educating and activating pension plan participants?
Visualizations are a promising pension communication tool for improving participants’ understanding and encouraging planning actions. We examine the impact of different forms of visualizations on the level of pension information understanding, willingness to take action, and on participants’ moods, perceptions of usefulness, and ease of use. Visualizations (as compared to text) are highly appreciated by participants and increase understanding of pension information. But, for participants with low financial literacy and numeracy skills, visualizations reduce willingness to take action.
In the first study, 307 participants, representative of the Dutch working population, were randomly exposed to one of four explanations of the effect of inflation and indexation on pension income: (1) a textual depiction, (2) a text plus static visual depiction, (3) text plus dynamic visual depiction, and (4) a control group (no information provided). Afterwards, respondents filled in a survey about their understanding of the presented information, willingness to take action, mood, perceived usefulness, and ease of use. In a second study, 700 participants from a large Dutch pension fund were randomly exposed to one of the four explanations of how pensions are accumulated: (1) a textual depiction, (2) a text plus static visual depiction, (3) text plus dynamic visual depiction, and (4) a control group (no information provided). Afterward, respondents again completed a survey.
Visualizations are highly appreciated and perceived as useful by all participants, particularly those with low numeracy skills. Participants with low financial literacy and numeracy skills find visual pension information more understandable. However, visualization decreases their retirement planning intentions. Static and dynamic visualizations do not differ in their influence on understanding, behavioral intentions, or any other communication goal.
When participants are provided with information in a format that fits their learning preference (visually vs. verbally-oriented) attitudes as well as perceived and actual knowledge are improved. Participants give better information quality ratings when information is presented to fit their learning style.
Visualizing pension information is promising. Participants perceive visual information to be more useful and understandable. However, for the vulnerable group of participants with low financial literacy and numeracy, visualizing pension information reduces willingness to take action and plan for retirement. Moreover, pension communication should not utilize a one-size fits all approach. Communication plans must consider that participants are different: some prefer visual information while others prefer verbal information. Pension plans should offer both verbal and visual communications material, to satisfy all participants and improve knowledge and attitudes. More research is needed to identify for whom and under which situations visualizations produce positive effects.
Lead researcher Charlotte Behnke, Lisa Brüggen, Friederike Sandmann
Project partners APG, ActuIT
Project status finished
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