Pensions Over Perks: Employees Favour Bigger Retirement Contributions Over Other Benefits

Employees Willing To Pay More Into Their Pension Pot If Their Employer Matched Contributions

Not only do employees favour higher pension contributions over other benefits, they’re also willing to contribute more if their employer matched their contributions.

• 51% would pay more if their employer matched contributions
• 38% would pay more if they could afford it
• 6% were unsure
• and 5% said no.

This highlights how much of a priority saving for retirement is for the UK workforce, and how you as an employer can influence behaviour when it comes to pension savings.

A Quarter Of Employees Would Change Jobs For Better Pension Contributions

Ignoring the value employees place on enhanced pension contributions could result in you loosing some of your top talent.

Employees value it as a benefit so much that 26% of employees would actually switch employers if they offered higher contributions.

Financial Security Is A Top Priority

Employees are prioritising retirement savings over and above other benefits. This suggests that they understand the importance of saving as much as possible into their pension, even if they don’t know how much they actually need.

Without sufficient savings, maintaining their standard lifestyle in the future is at risk. So, having a good Workplace Pension is important, especially when you factor in that life expectancy is getting longer – therefore employees will need to stretch their savings further.

Why Prioritise Enhanced Pension Contributions?

The data doesn’t lie. Employees clearly value a robust pension plan and are urging employers to prioritise enhanced contributions over other perks. In fact, pensions are so crucial that many are willing to switch jobs for a better retirement package.

But what does this mean for you as an employer? What can you gain from enhancing your pension contributions?”

Better Retention And Reduced Turnover Costs

Offering a higher level of contributions can be a significant deciding factor when people choose an employer to work for. It demonstrates that you’re investing in their financial future and supporting their financial wellbeing.

As employees view enhanced pension contributions as a valuable benefit, your staff are less likely to leave for another role with better benefits. Not only will you improve retention rates, this then has a knock on effect on company costs. The fewer new employees you have to hire and train, the less your company spends on recruitment.

Tax & National Insurance Savings

You and your employees can benefit from tax savings through pension contributions. For employers, these contributions are exempt from National Insurance contributions and can be deducted as a business expense, reducing the overall taxable income.

Your contributions as an employer count as an allowable business expense. These are deducted from profits before your corporation tax assessment.

This makes it a tax-efficient way of using your profits as you’ll get tax relief.

Richard Noble
Senior Consultant, Employee Benefits

Increased Employee Satisfaction And Loyalty

When staff believe their employer cares about their financial wellbeing, they’re likely to experience increased job satisfaction. And with that also comes improved employee engagement and productivity. It’s a win-win for all.

Not just that, happy employees who feel valued are likely to be more loyal to your company, helping to create a positive workplace culture.

Happier, Less Stressed Staff

Our 2024 Employee Benefits And Workplace Satisfaction Report revealed money worries to be the second leading cause of stress for employees. So, it’s in your best interest as an employer to help your staff in any way you can.

By providing a good pension, you can alleviate some of this stress, as funding their retirement is one less thing they’ll have to worry about. Reducing stress is highly beneficial, as it makes for happier and healthier staff.

Get Expert Pensions Advice

Employees want higher pension contributions – it’s as simple as that. It’s vital to listen to what your team wants from you, as it can have a drastic impact on business operations. If you’d like further support with your Workplace Pension, we can help you to review your current scheme.

Get in touch by calling 02074425880 or email help@drewberry.co.uk. Our financial consultants are industry experts and can provide support for your company pension.

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