Expert view: Clear, ongoing communication is vital to deliver better pensions

Employers have an important role to play in educating savers and helping them to prepare for their future after work, says Zoe Alexander, director of policy & advocacy at Pensions UK.

This article was originally published in REBA’s Financial Wellbeing Research 2025, in partnership with WEALTH at work.

Everyone deserves to enjoy a good life in retirement. But many employees don’t know how much money they’ll need or how to plan for it – and it could be hurting their retirements. Pensions UK research shows that one in five working households are on course to fall short of the income needed to meet the ‘minimum’ Retirement Living Standard, equivalent to £21,600 annually for a two-person household.

Helping savers prepare for their future after work is something we all need to do – government, pension providers, policymakers and employers.

Landmark review and policy interventions

The government has launched the second stage of the landmark Pensions Commission, 20 years after the review that introduced the highly successful auto-enrolment system, with a clear ambition to finish the job. Higher pension contributions must become the norm, more people must be brought into saving, and a state pension must always protect against poverty.

The Pension Schemes Bill currently going through parliament offers further opportunities. It includes measures to improve value for money and encourage scheme consolidation to improve returns over the long term.

Importance of communications

But legislation alone won’t prepare employees. REBA’s finding in the Financial Wellbeing Research 2025 that 71% of employers view low financial literacy around pensions as a challenge in the next five years shows that clear communication and ongoing support are vital.

That’s where employers can help to give their staff confidence. By sharing tools like the Retirement Living Standards, you can help employees see what different retirement lifestyles might cost.

Based on independent research by Loughborough University, the standards show how much people spend at three different levels to cover essentials like food, travel, heating, and even holidays – helping savers compare how their savings match up to their retirement goals.

For example, at the ‘minimum’ level of £21,600 per year for a two-person household, retirees can expect a self-catering or half-board holiday in the UK, eating out once a month and some affordable leisure activities with family and friends once or twice a week.

At the ‘comfortable’ level of £60,600, retirees can enjoy more spontaneity, including a two-week holiday overseas, a seven-year-old car replaced every five years and money to treat family members to a meal out from time to time.

The standards are a guide to the costs of living in retirement, not a target. And savers are encouraged to tailor them to their lifestyle, combining aspects from different levels. Helping employees think about the retirement they want, where they are now, and the steps to get there can make a real difference. There’s no one-size-fits-all, but everyone has a path.

By promoting awareness of savings and the value of employer contributions, employers can support staff in building the freedom, comfort, and security they’ve worked hard for.