It can be hard to encourage employees to contribute to their pension; with retirement seeming a far-away event, the average workplace pension scheme member saves only 4% of their income* (however the Pensions Policy Institute recommends 9-14%). Here, we look at some ways to incentivise your staff.
Promote that you’re a business who takes their employee’s well-being, including their financial security, seriously. Human beings who are proactively managing their finances and planning for the future tend to be happier, less stressed, and have greater peace of mind.
Provide calculations and figures that will help them to plan for the future, including what sort of annual income they might be able to expect based on their current contributions. Often, this annual figure can come as a bit of a surprise.
Many employees will not understand how pensions work, or why they are so important. Communicate to your employees in simple language, taking the time to explain without the use of jargon. Workshops, 1-1 meetings and open invitations to sit down with HR, someone from your provider, or a third-party pension expert will enable staff to get a clear picture of what they’re looking at when it comes to their pension fund. You can find a set of example employee communications in our help centre here.
The benefits of pension contributions
It might be hard to conceive retirement when it’s 40, 30 or even only 10 years away, but the fact is that the more your employees contribute towards a pension now, the sooner they can retire. Don’t be afraid to remind them of this – few will be hoping to work forever!
This can have a benefit for you, as a business, as well. The more contributions you make, the more you can include in your business expenses. Plus, an aging workforce who can’t afford to retire could prevent you from promoting younger staff and hiring fresh new talent.
Reminder that it’s not a luxury
Many feel that they simply can’t find more money to contribute towards a pension. Between their mortgage or rent, paying off debts and maintaining a social life, saving for the future just doesn’t come up that high on the list of priorities.
Remind employees that the younger they start, the more money they’ll have in retirement, and that this need may be greater than some of their immediate, less essential, expenses.