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11 Nov 2022
by Kirsty Moffat

How to sensitively communicate pensions and get employees engaged during a cost-of-living crisis

Helping employees with their pension contributions is an increasingly delicate issue due to the cost of living crisis. Here are some helpful tips to navigate this subject

How to sensitively communicate pensions and get employees engaged during a cost-of-living crisisHymans.jpg


Cost-of-living crisis. In 2021, you would be forgiven for thinking this is a dramatic, yet catchy phrase conjured up by the media. However, it now has substance, as the country is all too aware as we approach winter. 

People across the UK are feeling the pressures with energy prices and inflation rising to unprecedented levels. Interest rates are expected to continue to rise which is impacting mortgages, all while UK wages seem to fall in real terms. 

The Office for National Statistics reported that when we adjust for inflation over the year to October 2022, total pay fell by 2.4% and regular pay fell by 2.9%. To put that into context, this is the largest fall in growth since records began in 2001. Whilst employees struggle to pay bills, the very real issue emerging is that they have begun cutting back on their savings and cancelling insurance cover. Research from Scottish Widows found that 11% of adults have already cut back on their retirement savings.

Now there’s only so much employers can do for their employees to help them through this difficult period, short of increasing salaries above inflation. Of course, there is the option to offer one off payments (which obviously relies on the company being financially sound itself) but another is to offer employees financial education, wellbeing coaching, webinars and engaging with them about their finances. 

Although a cash injection offers employees a helping hand, this won't last long in the current climate. Financial education sessions are a great tool to help employees navigate the cost-of-living crisis – providing tips around how to save money and how to save energy. A key way of connecting with employees at this time is to communicate via posters/letters, targeted emails, notifications on intranets/pension websites etc. 

The message, "Now is the best time to contribute to your pension, but if you are struggling financially, this may not be the best time for you to do so", is a simple one but one that is difficult to articulate. I've set out some pointers for communicating with your employees at key stages of their career journey:

Jasmine, 22 y/o just starting out on her career: right now, Jasmine is most concerned with paying her bills and trying to save for a deposit for a house. Pensions are the farthest thing from her mind.

At this stage, Jasmine needs to be reminded of the benefits of saving with a long-term mindset, and encouraged to take advantage of the company’s pension contributions.

Ali, 45 y/o is looking to buy a new house but is struggling to find one in his budget. He knows he should look at his pension, but he’s worried given recent media coverage on pensions. 

The message to Ali is very much ‘ride the wave’, encouraging him to continue to contribute and reminding him that he still has a way to go until he retires. 

Ann, 60 y/o was hoping to retire at 65 and go travelling with her daughter, but looking at her pension online, her pot has drastically reduced and she’s thinking of reconsidering her retirement age

Employees like Ann who are approaching retirement are extremely vulnerable at the moment and will have seen a vast decrease in their pension pot. It’s important for her to review her options at retirement and the date she is due to retire. 

So, in essence, how can employers really help their employees? Listed below are some helpful tips to navigate this increasingly delicate, yet important subject:

1. Understand your employees’ needs – try looking at it like we’ve done above, consider the typical member and what they really need help with? Is it more financial education or communications around their options for saving? 

2. Make it personal – can you segment your employees and target specific age groups with different messaging? For example, Jasmine isn’t interested in hearing about at-retirement options, and likewise, Ann doesn’t want to know about how these savings are long-term as she’s concentrating on retiring in the short term.

3. Cut out the jargon – it’s imperative that your employees understand the message you’re trying to convey. It’s a difficult time for everyone, the last thing anyone wants is to be told something they don’t understand.

Kirsty Moffat
DC Investment Consultant
Hymans Robertson

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