Retirement savings affected by human factors

Last week I attended the Workplace Savings NZ conference 'Shifting the Story Line'.

The keynote speaker was UK behavioural economist Dr Nick Southgate, who spoke about how people's behaviour and attitudes to saving affect their decision making about retirement savings. Investing for your retirement is something we know we need to do, but it can be a difficult thing to commit to because of the way our brains work.

Dr Southgate says that human beings are designed to be more interested in what is happening now than in the future. In his presentation, he discussed some of the human factors that affect people's behaviour towards saving. He suggested some techniques that may help providers of investment funds to find ways to encourage people's saving habits.
Read the report in the NZ Herald

See the slides from Dr Southgate's presentation

Aim for clear, concise, and effective documents

Many speakers at the conference referred to another important factor in encouraging people to invest in KiwiSaver and other retirement savings schemes: providing investors with clear, easy-to-read information so they can make decisions with greater confidence.We're more likely to read, understand, and act on information that is written in plain language.

So in a presentation later on at the conference with financial consultant Helen MacKenzie, I emphasised ways of keeping readers interested in the content of investment statements and other financial information.

In particular, keep your readers happy by presenting what is often complex information using straightforward language and short sentences. Add useful visuals, case studies, and examples to help explain your concepts. Avoid legalistic language and include definitions of technical terms.

Think of the human factors: just as we find it hard to think about savings in the future, we struggle with information that's hard to process.

Everyday Things are Broken

Office talk on the first day back turned to what we read on holiday.

Donald Norman’s book ‘The Design of Everyday Things’ (published by Basic Books, 2002 edition) was a good holiday read. As the blurb on the back says, ‘It will do your heart good…’.

Norman’s book examines how people interact with Everyday Things — devices, equipment, appliances. He examines the tasks we need to perform to use Everyday Things, and they’re often not as straightforward as they should be. Norman is firmly on the side of the user.

We may blame ourselves when we can’t open this, or programme that. So it does your heart good when Norman clearly shows that struggling with the mechanical and information demands of everyday life is not always our fault. Many Everyday Things are not well designed.

So how do we cope? The answer is a complex mix of:
•  the psychology of human thought and knowledge — what we know about how things work
•  the psychology of Everyday Things — what information we get from how things look
•  the ability of designers to apply their knowledge of the first two points.

The designer needs to start with the goal to be achieved, consider the actions the user must do, make logical links between the tasks, and provide the user with visual clues.

We like Donald Norman’s debate about Everyday Things because we recognise the designer’s challenge with every document we write. The Write Plain English Standard mirrors the designer’s process — begin with the purpose of the task, consider what the reader must do, make logical links between chunks of information, and provide visual clues to make the reader’s task easy.