54% of employees believe their employer has responsibility to help them plan for retirement but 75% feel they aren’t being actively encouraged
Aegon research highlights that employers aren’t encouraging employees to check their workplace pensions during work hours, despite it being one of the most valuable benefits.
The majority (54%) of employees responding to the survey believe it’s their employer’s responsibility to help them plan for retirement but 75% said that they are not being actively encouraged by their employer to check their workplace pension during working hours. A further 21% of employees said they are not allowed to check their workplace pension during working hours.
However, if employers were to encourage them to check their workplace pension during work hours, 86% of employees said that they would.
The research also found that 73% of employees would welcome the introduction by their employer of regular time each month to check their workplace pension and most employees (71%) thought that 15 minutes a month would be a reasonable amount of time to check your workplace pension during work hours. Though, when asked how often they thought they needed to check their pension, many (40%) said quarterly would be sufficient.
In order to ensure workers have greater appreciation of this benefit, Aegon believes more employers should be encouraging employees to engage with their pensions.
Additionally, the research found that if given the time each month to check their pension, employees are most likely to: check their fund value, check their contributions have been paid and are correct and use ‘what if’ tools, for example to understand the impact of increasing contributions.
Kate Smith, head of pensions at Aegon said: “As the main route for employees to save for retirement, especially since the implementation of auto-enrolment, the workplace is the perfect place to encourage employees to engage with pensions.
“Employers have invested significant time and effort in establishing their workplace schemes and are key to helping employees develop good pension saving habits. By setting aside regular time to check their pension, staff are more likely to see the value of these important benefits provided by their employer and will start to think about saving and financial preparations for retirement.”
She continued: “Our own experience in the workplace has shown a 30% increase in employee engagement levels when the employer has endorsed the pension and encouraged employees to take action. This demonstrates how a small change from an employer can make a big difference to engagement levels in the workplace.
“Once employees begin to engage with their workplace pension, many will need help understanding what they see and what their options are. This is where advisers can step in and run workplace seminars to offer employees hints and tips on how best to achieve their retirement goals, while also starting to build relationships with future clients.
“While engagement is a good start, those who do build substantial pots will then be much more likely to recognise the benefits of financial advice.”