3 ways to engage younger workers with saving for their pensions

Pensions don’t have to be stuffy and boring. You just have to make them relevant

“I wish I’d started sooner,” says almost everyone about their pension.

And it’s a good thing to wish – the sooner people start saving, the more they will have when they retire.

With compound interest, investment growth and tax relief, pensions are easily the best long-term saving option. But you can’t turn back the clock and start saving earlier. What you can do is help younger colleagues pay attention and grab the opportunity while they have it.

Engage them early

As well as the purely mechanical financial benefits mentioned, there are psychological and wellbeing-related benefits from starting saving earlier.

Less worry, confusion and stress about long-term finances; greater financial resilience and emotional stability; even improved productivity at work. However, unlike the financial benefits, these don’t come automatically.

It’s not enough to have a pension and passively contribute through payroll – an employee needs to engage with their pension to truly benefit.

But typically, the younger people are, the less bothered they are about all this. The person who will benefit from the pension seems far removed from now.

Tips for helping younger workers learn to love their pensions:

1. Put pensions in context with other demands

Perhaps the biggest obstacle to overcome when engaging with young people is detachment, the lack of interest and ownership that has people switch off as soon as you mention ‘pension’.

Detachment is common among all ages but its particularly prevalent for younger employees.

Pensions are only one part of your employees’ financial lives, so acknowledge that. Instead of talking about pensions in isolation, acknowledge the many competing priorities and goals they may have.

Show them you understand their worries about rising living costs or wanting to get on the housing ladder, and include these topics in any financial education or guidance you offer.

First, you need to help your younger employees get comfortable with money and help set them up to cope with financial challenges.

Then you can show them how and why to plan for longer-term priorities at the same time.

Cover the benefits of starting early, walk through the options and show them what to do, but keep it simple.

Until employees feel in control of their more immediate needs, they’re unlikely to spend much time thinking about their future.

By starting with what’s important now and building from there, you’re letting pensions fit in naturally.

2. Keep communications relatable

Aside from baffling people, pensions have an image problem. They tend to be thought of as stuffy and boring. But that’s because we don’t focus enough on the best bits.

What about all that free money from the government, the unofficial pay rise of employer contributions, and the positive impact we can have on the environment and communities around the world – things that are relevant now?

If we want to engage younger people, we need to show them this side of the story. Selling a dream of cruise ships and golf courses won’t cut it because it’s not relatable and won’t be for a long time.

But sharing true sustainability stories about the companies their pension invests in does work – it appeals to their emotions and values.

Remember to speak in everyday language and avoid jargon. We want to make it as easy and natural for employees as possible.

3. Give them an app

It may be a cliché to think that young people will be better with tech, but there is something to it.

With a pension app, managing workplace savings can become part of an employee’s everyday experience – always visible and accessible. It’s another way to make them feel in control of their finances, tackling those habits of detachment and avoidance.

You can also send nudges through an app, drawing employees in when its relevant without demanding too much of their time and attention. And if all your pension communications and documents are digital, doing away with an avalanche of paper, it’s another notch on your climate-friendly belt.

With your help, younger employees can get that early start at saving. But you shouldn’t have to do it alone. If your pension provider isn’t already offering to assist you with the three things we’ve touched on today, you and your employees might be better off shopping around.

Cushon is exhibiting at the REBA Wellbeing Congress 2024 on 20 June. Book your ticket here.