It can be challenging to engage employees with their pensions, especially during tough economic times where the high cost-of-living is forcing many people to prioritise their current spending over future saving. However, with over a third of employees (40%) reporting that they are not confident they have enough money to retire and an additional 11% saying they do not think they will be able to retire, it’s more important than ever that companies are proactively encouraging employees to consider planning for their retirement.
Actively supporting employees in their pension planning can help alleviate worries about retirement, plus enable succession planning to ensure smooth transition of talent. This blog explores five tips that can help boost pension engagement, making it easier for employees to understand, value, and actively participate in securing their financial future.
- Simplify the Messaging
Pensions are notoriously complex, filled with jargon and technical terms that can intimidate employees. To increase engagement, companies can simplify the language used in all pension-related communications and focus on ensuring messaging is broken down into digestible chunks, using clear and concise language, and avoiding industry jargon. Visual aids like infographics can help explain concepts quickly and effectively, making it easier for employees to understand the importance of their pension plan and how it works.
- Leverage Technology
In today’s digital age, technology plays a crucial role in enhancing pension engagement. Our research found that nearly a third (28%) of employees don’t access information about their benefits (1) which evidences the importance of engaging employees and targeting them with resources that are accessible to them. Companies should look to provide employees with easy, anytime access to their pension information through user-friendly online portals or mobile apps. These platforms often offer tools for tracking pension growth, projecting future savings, and exploring different retirement scenarios. Gamification features, such as progress trackers or reward points for completing pension-related tasks, can also make the experience more engaging and motivating.
- Provide Regular Communication and Updates
Engagement with pensions shouldn’t be a once-a-year event. Regular communication will keep the topic front of mind and encourages ongoing participation from employees. Monthly newsletters, quarterly webinars, or annual pension statements are all effective ways to keep employees informed.
It is also crucial to offer a personalised approach to communications; being generic can fail to resonate, for example, younger employees might be more interested in understanding how their contributions will grow over time, while older employees may be more focused on their retirement readiness. Our research shows that differences in retirement confidence across different age bands; those aged 35-44 were most likely to say they did not think they would be able to retire, whereas those under 35 were most confident they would have plenty saved.
- Offer Employees Financial Education and Support
Financial literacy is arguably the most significant barrier to pension engagement. Many employees may not fully understand how pensions fit into their broader financial picture. Offering financial education sessions, either in-person or virtually, can empower employees with the knowledge they need to make informed decisions. Our research found that women are less confident than men, with just 2% having a ‘plentiful’ amount of money for retirement [i]. Companies need to acknowledge the gender pensions gap, and encourage education and involvement. Implementing other employee benefits – such as discounts portals – can also help alleviate financial strain and enable pension investment.
- Create a Culture of Retirement Planning
Fostering a workplace culture that values retirement planning could significantly boost pension engagement, and alleviate financial worries – 31% of employees worry about their personal finances to the extent it negatively impacts productivity.
Companies can encourage their managers to talk openly about the importance of pension savings and to lead by example. Additionally, sharing success stories of employees who have effectively planned for retirement and how it has positively impacted their lives could help pensions to resonate. Providing additional support and encouraging conversations around retirement planning can reduce the stigma around the issue and the business could benefit from secondary benefits such as improved productivity.
Conclusion
Boosting pension engagement requires an approach that combines clear communication, with ongoing support. By simplifying the messaging, leveraging technology, and creating a culture that values retirement planning, companies can empower employees to take control of their financial future and create a more satisfied workforce.
[i] Mind the Gap 2023
