Ideas to encourage employees to back pension savings as part of their everyday financial wellbeing
Although the rationale for saving and investing is simple – save now to enjoy a similar lifestyle in retirement – the reality for many workers is that retirement seems too far away to save and invest for. The result being that many workers will not be able to enjoy the same standards of living in retirement as they had during their working life.
So what can employers do to encourage all their employees to engage with their pension?
Highlight the importance of matched contribution
Many employers will match the contributions that their employees make to their pension, usually up to a certain percentage limit. If you offer this benefit, ensure your employees understand that they are essentially receiving money that they would not otherwise have.
In 2019, Hargreaves Lansdown found that 49% of employees choose to increase their monthly pension contributions due to good communication from pension providers, but when their employer offers to match their increase in contributions, the amount choosing to save more increased to 61%.
This emphasises the importance of clear communication around matching contributions, both from you and your pension provider.
Use online tools
Signpost online tools like pension calculators, or retirement calculators that are designed to show whether you’re on course to save the amount you need in retirement. These tools can be useful for your employees to visualise what their current pot will look like when they hit pension age and may motivate them to start saving more in the shorter term.
Regular communication
Many firms do provide communication relating to employees’ pensions, but only at certain times of the year, or during a set time period. To keep employees engaged in their workplace pension and to cover all new joiners, employers should be communicating on a regular basis to their employees about the importance of thinking about their pension before they reach retirement age.
Financial education
It has been proven that employees feel motivated that their employer cares about their wellbeing when financial education is provided. This can therefore increase employee retention and reduce recruitment costs.
There are providers that offer financial wellbeing sessions in the workplace, and speak to your employees as individuals, with individual financial needs. With some sessions tailored specifically towards workplace pensions, financial wellbeing in the workplace can be a great place to start when trying to engage your employees with their pensions.
Overall, a pension fund is the primary way that your employees can enjoy a healthy, happy and financially secure retirement. Make sure to use some of these suggestions to help put your workforce on the right path.
This article is provided by Hargreaves Lansdown.
In partnership with Hargreaves Lansdown
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