What was examined in the article?

This article describes a study on the effect of choice guidance on choosing between a fixed or variable pension income. This is done using three visualizations: (1) participants see animations of pension income paths, immediately followed by a representation of their fixed and variable pension benefit, based on an expected, a good and a bad scenario (with 50 income paths depicted in the background); (2) participants see the above without animations; and (3) participants only see the average pension income paths for the three scenarios, not the 50 possible income paths. Half of the participants see the retirement income in real terms and the other half sees the nominal income. They are then presented with the choice between a fixed or a variable pension. In addition, we ask half of the participants to make the choice based on a brief textual explanation, thus before they see any of the visualizations.

What are the main findings?

  • Providing information on variable pension benefits through visualizations leads to more respondents choosing than just a textual explanation.
  • Within the three visualizations, variable pension is chosen most often by respondents who ‘experience’ possible income paths through animations. This visualization also leads to the highest satisfaction with the information shown and with the choice made by the participant.
  • The variable pension option is chosen more often when nominal incomes are shown, instead of real incomes.
  • The higher the level of education, the more often people choose the variable pension income.

What can we do with the findings?

Pension providers are legally required to set up a (digital) choice environment. Showing information in terms of real incomes might leads to information processing difficulties for lower educated people. It is important to develop a good customer journey that supports participants during the phases of awareness, information gathering, evaluation and choice.The study shows that visualizations and thereby animations be of value in such environments.

Where can I find supplementary materials?

Additional materials in Dutch are available with this paper in the form of visualizations and explainer videos. Please read the user license (Word document, also in Dutch) and download the zip files from the following links:

Please note that it is only possible to extract the zip files after taking note of the user license.