Poll results: Tips on how to get employees paying back into their pensions
2020 was a difficult year for many employees. From suffering with their mental and physical health through to family and financial stresses. For some, it was difficult to see a light at the end of the Covid-19 tunnel. There were some employees and their families who were hit harder than others, especially financially. Some suffered job loss, furlough or pay reductions within their household, causing their finances to be put under serious strain. And as a result, some employees were looking for ways to cut costs and increase their income.
Some employees did this by stopping their pension contribution whilst their finances were impacted by Covid-19. However, with the pandemic lasting much longer than ever expected, and as we approach the 1-year anniversary since it all began, how many employees are still not paying into their pension?
Although it’s important to reduce financial stress where possible, it’s also as important to weigh up the risks to not saving for retirement. In a recent poll, we asked employers if they were concerned about the number of their employees who stopped their pension contributions during the pandemic. Here were the results:
- 74% of employers said yes, they were concerned;
- 22% said they didn’t know; and
- 4% said they were not concerned.
With the majority of employers saying they were concerned, this is clearly still an issue for many employees. So, for those businesses looking to get their employees paying back into their pensions, here are some top tips.
A simple reminder
We all have different things going on in our lives and as life returns to some kind of normal, many employees may not have realised they are still not paying into their pension. It’s vital to communicate to those employees. A simple reminder could give them the nudge they need.
Make it easy
Some employees may be put off by the thought of restarting their pension. They may think there is endless forms to fill in or calls to make. So, in your communications, remind them of the process and how to start it back up. Make it clear and simple and any instructions you give should be easy to follow.
Explain to employees why it’s important
It might not be the right time for everyone to start paying back into their pension. However, for those that can, explaining why it is important could help give them the motivation they need. Meeting financial goals, protecting family or achieving the desired retirement are just a few reasons.
Appeal to all employees
Remember that your employees may have stopped their pension contributions for different reasons. And the reason why they might want to re-start it, will be different too. In your communications, make sure you consider this. From the younger employees who do not consider their pension to be a priority, through to those who are nearing retirement, ensure your messaging reflects different employee’s life stages.
Use different communication methods
Using multi-channel communications can really help you to reach and engage with as many employees as possible. Try using email, videos, posters, an online portal or even face to face (online or in person) conversation. Different people respond to different methods, so by using many, it will help you get the message across.
Whether you are part of the 74% of employers who are concerned about employees who have stopped their pension contributions or part of the 22% who don’t know, it’s really important to take action. Every employee’s circumstances will be different, and it’s unlikely you’ll be able to get everyone back up and running in one go. But what you can do is provide them with the information, tools and resources they need to make a well-informed decision for themselves.
If you would like to find out more about how Secondsight can help you to implement or review your current workplace pension scheme, then contact us today.
Secondsight is a trading name of Foster Denovo Limited, which is authorised and regulated by the Financial Conduct Authority.
Information correct as of 10/03/2021