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21 Feb 2023
by Steve Jellie

How to make pensions more interesting to younger employees

There may not be a single solution for getting young people to engage with the idea of saving for their retirement. But there are steps employers can take

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It’s little wonder that there is a disconnection between most younger people’s views of pensions and their real need to engage with their own scheme, right now, what with the complexities of pension rules and perceptions of the boring, adult financial decisions required.

Digital tools might seem the answer to engaging those younger employees. But there are much larger factors involved in making pensions relevant. Your pension scheme’s design and overall engagement plans can have a much greater impact than you may realise.

Contribution design

Workplace pension contribution designs which only offer employer contribution increases for employees at certain ages or length of service tend to dissuade younger employees from engaging with them.

With a range of demands on disposable income, it is also inadvisable to structure contributions in a single flat rate. If higher employer contributions aren’t offered in return for higher employee contributions, savings or spending are more likely to happen elsewhere.

Workplace savings

Expanding the company pension as part of a wider workplace savings strategy could be key to unlocking engagement, particularly with younger employees. Different generations within the workforce have differing needs. Younger employees tend to prioritise buying property, debt consolidation and shorter-term savings.

Including savings options such as ISA, LISA and savings accounts alongside the pension, and building a benefits strategy to allow contributions to be diverted between these enables employees to take better control of their finances. This encourages younger employees to form good savings habits, improving their financial wellbeing and better enabling pensions saving.


Investment available within the pension scheme, especially the default fund, also plays an important part in ensuring relevance for younger employees. Research by LGIM shows that younger employees are more likely to invest more in their pension if it has a positive impact on the environment.  

While your pension scheme should already be taking environmental, social and governance factors into account, ensuring that these components of your scheme strategy are effectively communicated to employees could boost engagement.

Digital Tools

Digital tools are useful in supporting engagement goals. However, engaging, interactive websites and apps are really now a minimum expectation, especially among younger audiences. Relevant and timely communications (including bespoke messages), delivered in user-friendly ways, will truly engage employees and prompt action.

In addition, usage information enables the most efficient optimisation of tools and to gather employee feedback.

Financial wellbeing

It is vital that younger employees understand the importance of saving for retirement as early as possible. Pension education should be part of a wider financial wellbeing agenda. It is important to have a financial wellbeing strategy that supports employee objectives and is aligned with business objectives.

Most employees joining the workforce have little understanding of how to arrange, prioritise or organising their personal finances. Supporting employees with their financial education and needs not only demonstrates that you care about their wellbeing, but increases engagement.

Helping employees understand the importance and relevance of their pension, how it can assist their future goals and reduce financial anxiety can make them a healthier, happier and more productive employee.

Using the right information, wording and mode of delivery are important factors in getting the messaging right.

Employee support

Offering support improves understanding and confidence around pensions. Employees should have easy access to information as well as contact points for queries and feedback and access to professionals for further information, guidance and advice.

Monitoring and acting on feedback shows employees that their views are valued and enables changes to be made. This ensures that pension schemes and related communications are relevant and effective.

There may not be a silver bullet for making a pension scheme more relevant to younger employees. Usually, this will require lots of small steps and improvements. But, just by asking the question ‘how relevant is the pension to younger employees, and can we improve it?’ you are already on the journey to making progress.

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Buck is a global, integrated HR consulting, benefits administration & technology services provider.

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