UK employees haven’t prioritised saving into their workplace pension in the past. Thankfully, times have changed, and now 87% make regular monthly contributions.
Employees know they must save for their future and that workplace pensions are one way of doing so, but not everyone completely understands them. This means that not everyone is saving enough to have the retirement they want.
Naturally, employees want to change this and want their employer to help.
In the Drewberry™ 2022 Workplace Pension Survey, we asked, ‘What areas would you like help with to understand your workplace pension better?’ The top answers employees gave were:
It’s not surprising that workers are most concerned about saving enough, considering that 41% of respondents don’t know what percentage they pay into their pension each month.
Another 41% of employees said they don’t know what their employers contribute, either.
It’s nearly impossible for employees to know whether they’re saving enough for retirement if they don’t know their monthly pension contributions.
When asked, ‘Do you feel you contribute enough to your workplace pension?’ 24% of employees disagreed. Another 10% said they weren’t sure. 29% of employees also didn’t think their employer contributed enough to their pension.
For employees to know if they are saving enough for retirement, firstly, they need to have a goal. They need to ask themselves, ‘What do I want from retirement?’
Without knowing what they want, there is no way of knowing if what they are saving is enough to reach the goals they have set out.
Employers can help employees achieve their pension goals in two main ways:
Currently, employees don’t know enough about their workplace pension or the tax benefits that come with it.
Part of the reason for this lack of understanding is the communications provided by employers aren’t getting the message across. Understandably, employees are unsatisfied with not receiving important information about their pension.
Employees dissatisfaction suggests that the communication from their employer about their workplace pension isn’t engaging.
It either doesn’t contain the correct information or isn’t being delivered in a way that employees find easy to take in. In some cases, pension information might not be provided at all.
It’s in an employer’s best interest to get their communications right, especially if their workplace pension provision is good.
Additional employer contributions are among the top 3 most sought after employee benefits. This means they can be a powerful tool to improve employee morale and productivity.
41% of the workforce being unclear about how much their employer pays into their pension is a missed opportunity.
It’s also important for employers to understand which communication channels employees find most engaging. For example, 28% of employees said they would like a company-paid meeting with a final adviser. Only 7% are currently offered this option.
Employers can also help ensure employees are saving enough by increasing the contributions they make.
Doing this will improve the health of employees’ pension pots and might influence them to increase their own contributions to improve it further.
Workplace pensions are a legal obligation for employers, but they can also be so much more. If implemented and communicated in the right way, employees and employers stand to gain an awful lot.
Employees can rest easy knowing that they are on track to living out the retirement they’ve always wanted, and employers can benefit from a workforce that feels valued and appreciated.
If you need pension advice or want to discuss how to find the right group scheme for your employees, email firstname.lastname@example.org or call us today on 02074425880 and speak to one of our friendly expert advisers.
Employee Benefits Consultant at Drewberry