Your employees don’t have a pensions problem - they have a relevance problem

Are your employees disengaged because they don't understand pensions, or because pension communications don't feel relevant to them?

Most employers understand the importance of helping their employees prepare for retirement. Yet despite years of pension communications, campaigns and education, many employees still struggle to engage with long-term saving decisions.

Meanwhile, research suggests that while most people are on track to achieve a minimum standard of living in retirement, far fewer are expected to reach the moderate or comfortable lifestyles many aspire to.

This raises an important question for employers.

Are your employees disengaged because they don't understand pensions, or because pension communications don't feel relevant to them?

The latest Retirement Living Standards offer a useful lens through which to consider that challenge. But their real value may be less about the numbers themselves and more about what those numbers reveal.

Why pension engagement is still difficult

For most employees, retirement exists in competition with more immediate priorities: Mortgage payments, rent, childcare, rising household bills, saving for a home and often caring for relatives.

Against that backdrop, retirement can feel distant.

This is why many pension providers, employers and advisers use the Retirement Living Standards. They help translate an abstract future into something employees can visualise.

The latest figures suggest a single person would need:

£13,900 a year for a minimum lifestyle
£32,700 a year for a moderate lifestyle
£45,400 a year for a comfortable lifestyle

For employees, these figures can provide an important reality check. But they can also create a new challenge.

When a useful benchmark becomes an unhelpful shortcut

The attraction of any benchmark is simplicity. Employees want straightforward answers. Employers want accessible ways to communicate complex topics.

The Retirement Living Standards provide both. The problem is that retirement is not standard.

A benchmark can show what retirement might cost for a hypothetical individual. It cannot show what retirement will cost for your individual employees. And that distinction matters.

When your employees see a figure presented as the cost of retirement, they may assume it applies directly to them. In reality, their circumstances could look very different.

That's where engagement can begin to break down.

What retirement benchmarks can't tell your employees

Your workforce has people with different goals, responsibilities and expectations. A single benchmark cannot fully account for:

Housing costs: The standards do not include mortgage repayments or rent, meaning they broadly assume home ownership without housing debt in retirement. For your employees who expect to retire while renting or still paying a mortgage, actual retirement costs could be much higher.
Location: National benchmarks cannot reflect the significant differences in living costs that exist across the UK. Even London and non-London comparisons only tell part of the story.
Tax: The published figures represent spending needs rather than gross income targets. Without context, your employees may underestimate the income needed to achieve their desired lifestyle.
Changing retirement lifestyles: Retirement spending often changes over time. Your employees may spend more during active early retirement and face different costs later in life. One annual figure cannot capture that journey.
Personal priorities: Some of your employees prioritise travel. Others may focus on helping family, supporting dependants or maintaining a particular lifestyle.

Retirement planning is ultimately personal.

Lesson for employers isn't about retirement targets

The lesson for employers is about communication.

The most effective pension engagement strategies don't simply provide more information. They make information feel relevant.

Your employees are far more likely to engage when they can see themselves in the message. That means moving beyond generic retirement figures and connecting retirement outcomes to real-life circumstances, career stages and financial priorities.

In practice, this often means you need to:

Segment communications for different employee groups
Explain what retirement benchmarks do and do not represent
Show how workplace pension decisions influence outcomes
Link retirement planning to wider financial wellbeing goals
Make guidance and support easy to access

The aim is not to replace the Retirement Living Standards. It is to place them in context.

Turning pensions from a future problem into a current conversation

The latest Retirement Living Standards have an important message. Retirement is becoming increasingly expensive, and many individuals may not be saving enough to achieve the lifestyle they want.

But the bigger opportunity for employers is not simply sharing the latest figures. It's helping your employees answer a much more important question:

When pension communications move beyond benchmarks and start addressing individual circumstances, your employees are more likely to engage, more likely to act and more likely to value the support provided by you.