Pension awareness day – Engaging employees with their workplace pension
Today, 15th September, is pension awareness day; a national day that aims to raise awareness of the importance of saving into a pension and to help ensure people are saving enough for their retirement.
When it comes to workplace pensions, as an employer, you play a huge part in helping your employees save for their future. And with most people being part of a workplace pension, thanks to auto-enrolment, it’s vital to ensure your employees know the importance of their pension pot. Here are our tips to remove the jargon, improve knowledge and ultimately get employees engaged with their pensions.
Having employees who are engaged with their pension takes time but it often begins with good communication. Pensions can seem expensive and complicated so the best place to start is with the basics. What type of pension is it? What’s their contribution versus yours? What are their options for increasing and decreasing their contributions? These points may seem simple but don’t assume everyone knows them. Whether they’re new to pensions or have been paying into one for years, it’s always good to have a reminder.
It is also important to focus on the benefits of paying into a pension. It’s not all about how much an employee should be paying in, and your communications should reflect this. Benefits such as tax relief, how much you as an employer contributes, or how regular contributions are invested and can grow throughout their career, should also be highlighted. No matter how close or far away an employee is to retirement, it’s easy to feel like you’re not reaping the benefits. A small reminder of these can provide a lot of motivation and encourage them to think about their future.
The end goal
Ensuring your employees have retirement goals is crucial. After all, how can they hit a target they’ve never set? The more personalised the goal and fined tuned it is to suit them, the more important it will become in their lives. But people often underestimate how much money they will need to save in order to achieve the retirement they desire. One way for employees to set realistic goals is through cash flow modelling. This tool helps set an ideal retirement age, work out a savings strategy and calculate exactly what they will need to do now and in future to achieve their objectives – a professional financial adviser can provide valuable help on this. And, as our lives rarely pan out exactly how we had planned, it’s always good to revisit this often and make sure employees are on track.
Pensions shouldn’t feel complicated to anyone. Breaking them down and starting with the basics, the benefits and the end goal is a great place to start when trying to improve pension engagement.
Remember to always speak to your pension provider too. There are many options out there to help individuals get to grips with their pension and ensure they are on track to a comfortable retirement.
Creating a workplace pension that’s right for your business can help your employees feel confident about their financial future and be beneficial for you too. At Secondsight, we can ensure both you and your employees get the most out of a pension scheme as possible. Contact us to find out more.
Accessing pension benefits early may affect levels of retirement income and is not suitable for everyone. You should get advice to understand your options at retirement.
Secondsight is a trading name of Foster Denovo Limited, which is authorised and regulated by the Financial Conduct Authority.
Information correct as of 14/09/2020