More Than A Quarter Of Employees Willing To Switch Jobs For Better Pension

17% Of Employees Don’t Think Their Employer Contributes Enough

Recognising how important a good pension is for employees, we wanted to delve deeper to understand how satisfied they are with their current provision.

We asked “Do you feel your employer contributes enough towards your pension?” Although the majority of employees were satisfied with what their employers offer, nearly one-fifth said they should contribute more.

• 39% yes, but would prefer a larger contribution
• 31% yes, contributions are very generous
• 17% no, they should contribute more
• 12% not sure.

Employees Want More Than The Statutory Minimum

Employers are legally obliged to contribute a minimum of 3% of their employees’ salary, but employees want more. In fact, over half of UK employees said it was “very important” that their employer did contribute more than the 3%.

As the value of a robust Workplace Pension becomes increasingly clear, it’s crucial to ensure your pension scheme is living up to expectations.

Regularly reviewing your pension arrangements not only aligns with best practices but also maximises the benefits for you and your employees, securing a brighter financial future for everyone involved.

Richard Noble
Senior Consultant, Employee Benefits

Employees Would Prefer Higher Pension Contributions Other Other Benefits

60% of employees said that they would actually prefer higher pension contributions over other benefits. This indicates the importance of a strong Workplace Pension scheme.

In our 2024 Employee Benefits and Workplace Satisfaction Report, we also found that enhanced pension contributions were in the top five benefits employees wanted to receive from their employer.

This excellent insight can help you to tailor your employee benefits package to better suit employee preference. When successful, you have a better chance of keeping your top talent on board.

Getting The Best Workplace Pension For Your Business And Employees

With 26% of employees willing to change jobs for an employer with a better Workplace Pension, it’s in your best interest to re-evaluate your company’s benefits to retain your top talent. It’s important to:

1. Review Your Workplace Pension

Start by conducting a thorough review of your current Workplace Pension scheme. This will ensure it meets the needs of your employees.

• Benchmark against industry standards
  Benchmark your pension contributions with industry averages. Do any of your competitors offer more than 3% contributions? If so, consider matching or exceeding the percentage to remain competitive
• Assess your default fund performance
  How is your scheme’s default investment fund performing? Ensure it aligns with the long-term growth goals of your staff, as well as their attitude to risk
• Get employee feedback
  Conduct internal surveys or hold focus groups to get a better understanding of what your employees want from their pension. Use this feedback to make informed decisions about your scheme
• Make sure the scheme is tax efficient
  The key to ensuring your employees are maximising their income and savings is through tax-efficient pension schemes. Salary sacrifice can increase employees’ take home pay and enhance pension contributions. It also enables you to save money through tax and National Insurance, and it doesn’t cost anything to set up. So, big savings for employees and employers alike!

Reviewing your Workplace Pension helps to reduce the annual management charges. By regularly comparing different pension schemes, you can find more cost-effective pension options for your business.

Lowering these charges also means employees get to keep more of their contributions, and save more as a result.

Nick Nelms
Senior Employee Benefits Consultant

2. Introduce Financial Wellbeing Benefits

Offering a range of financial wellbeing benefits can improve your employees’ financial education and security. This can help them make informed decisions when it comes to their pension savings. Consider:

• Financial workshops
  Organise workshops on topics such as budgeting, retirement saving strategies and debt management. These sorts of sessions help staff to make better financial decisions and plan effectively for the future
• Online resources
  Ensure your employees have easy access to a variety of resources, including articles, webinars, and tools. These can cover different financial topics and be accessed by employees whenever they need it
• Personalised financial planning
  Offer 1-2-1 sessions with expert financial advisers. Individual support can help employees address their personal concerns and goals by tailoring guidance to their circumstances
• Financial wellness apps / platforms
  Implement financial wellness apps and online employee benefit platforms. These applications can feature budgeting tools, financial calculators, and educational modules to help staff manage their finances better.

By integrating these benefits into your package, you can support your employees in achieving their financial goals and help to reduce any financial stress.

3. Provide Better Communications And Education

For employees to get the most out of their Workplace Pension scheme, it’s important for them to understand the benefit. Considering nearly 20% of employees aren’t clued up on their pension, it might be that you do offer a good pension but it’s not being communicated well.

Staff also don’t understand pension tax relief or salary sacrifice, so effective communication and education will go a long way.

When your employees have a robust understanding of their benefits, it helps them to see the true value of their pension scheme. For example, if salary sacrifice options are available but staff don’t know how it works or the tax benefits associated with it, they might not find any value in their pension plan.

Get Expert Advice And Help To Review Your Workplace Pension Scheme

To ensure your Workplace Pension scheme is a great fit for you and your employees, reviewing the scheme regularly is essential. You also need to offer good pensions education and financial advice, and most importantly, communicate the retirement benefits well.

By doing this, you can help to prevent your top talent from jumping ship.

If you’d like help to review your Workplace Pension scheme, get in touch on 02074425880 or email help@drewberry.co.uk. Our employee benefit consultants are experts, and will help you find out if your pension scheme is right for your needs.

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