Workplace pensions are an important employee benefit and a key way to help your employees save for their future. But, encouraging them to actively engage with their workplace plan isn’t always easy. With busy lives, bills and other financial commitments such as rent or a mortgage to pay for, your employees might find it a challenge to find time to check on their pensions. Little nudges from you can help keep them on track.
You already play a significant role by sharing information, making contributions and communicating benefits. Take a look at our infographic which highlights four suggestions that you can use to inspire your employees to engage.
How to engage employees with their retirement savings
Help them to see how contributions could add up
A pension pot could be one of your employees’ most valuable assets at retirement. Pointing them to an online pension calculator could provide a tangible idea of how their contributions over time could add up to a healthy pension income. Remember, the value of an investment can fall as well as rise and isn't guaranteed. The value of a pension pot when employees come to take benefits may be less than has been paid in.
Explain why it's important
Recent research suggests that single person will need a minimum pension income of £20,900 a year to have a moderate standard of living in retirement.1 This is based on the assumption of having no mortgage or rent to pay – and could increase as the cost of living rises. Sharing comparisons like this with your employees might help to highlight the importance of saving and inspire them to plan ahead to reach their goal.
Demystify investments
If your employees are more aware of where their pension contributions are invested and how it could align with their values, they might feel more compelled to engage with – and take control of – their savings. Encourage them to activate their online pension accounts, where they will be able to access fund factsheets and key investor information which explains more about the specific funds their money is invested in. They can also learn more about responsible investing on our responsible investment hub.
Provide guidance and tools to help
It can be difficult for employees to go it alone, so make sure to point them to guidance and interactive tools to help them in their savings journey. Our financial wellbeing hub has a range of resources that could be a good place to start. Another tip for any communications: don't use jargon – simple clear messaging can have the most impact.
References
1 - Retirement living standards in the UK 2021. Data source, Pension and Lifetime Savings Association, maintained by Loughborough University Centre for Research in Social Policy. October 2021
Here are some useful links you might want to share with your employees:
- Our tool Your retirement planner could help employees compare what they’ve saved to what they’ll need, and review their retirement options.
- If you have a TargetPlan workplace scheme with us, employees can login to access modelling tools to help them forecast their savings. Remember the value of any investments can fall as well as rise and isn’t guaranteed.
- MoneyHelper’s Pension Calculator can help employees understand how their pension contributions could add up.
- Our Financial wellbeing hub has a range of resources that could help your employees become more financially resilient and improve their money mindset.