Today is Pensions Awareness Day – a day dedicated to raising national awareness of pensions while also encouraging employees to save for their future
As a society, British people are facing a major challenge, we are not saving enough for the future. While we would all like to retire at a reasonable age, the truth is we are just not doing enough to make that happen. A recent government report showed that as many as 12 million people are simply not saving enough for their future.
With it being Pensions Awareness Day today, employers across the UK have the best possible opportunity to educate their employees on saving for their retirement.
The lack of interest in saving for the future may lie in the fact that pensions are not the most exciting topic to discuss. So how can employers get the pensions message across?
Ian Bird founder of Mybenefitsatwork and business development director of Secondsight explains “There is no right answer to this but explaining any financial matter in plain English and using different methods to deliver the message is essential. Our latest research entitled The workplace communication challenge revealed that 9 in 10 HR professionals face challenges when communicating benefits, which includes their pension scheme. Also, 47% of the respondents still communicate their employee benefits through a handbook, which is unengaging and gets out of date very quickly.”
“Traditional techniques, when it comes to communication in the workplace, do not always deliver the best outcomes. Hence a multi-channel approach is always recommended and the use of technology to get a workforce engaged is paramount. We’re all increasingly using tablets and other mobile devices to view information. Why should pensions be viewed any differently?”
The problem also seems to be generational as a recent report from YouGov highlighted that four out of ten 18-34 year olds do not have any pension provision, compared to one in five over 55s and 22 per cent of 35-54 year olds.
One of the main reasons for this was the lack of knowledge about pensions among millennials, with 27 per cent saying they didn’t understand how the system worked.
Harri Mead, associate, client servicing at Punter Southall Aspire highlights ways employers can overcome this issue stating, “Many young people are living pay cheque to pay cheque while trying to save sufficient funds to put down a deposit for a flat or book flights to a bucket list of destinations. Entertaining games or financial incentives could, therefore, prompt more under 30s to log into a dashboard and consider their retirement well in advance.”
“However, this method of enticing younger savers to a dashboard through entertainment is a short-term solution. Millennials may log on once or twice to further their progress in a game, yet this engagement will not be sustainable if they are baffled by the financial content.”
As technology and innovation progresses further, employers must do everything possible to utilise these technologies to deliver important messages and educate their staff especially when it comes to pensions. Using a simple and responsive system is exactly what needs to be done to engage with staff which will increase their knowledge and increase their retirement pot too.
Malcolm McLean, senior consultant at Barnett Waddingham, believes that Pensions Awareness Day is an important campaign for the industry, he said; “Having a dedicated Pension Awareness Day is a very necessary and laudable initiative, which we in the industry should all support.
“It is also an opportunity, in my view, to examine more critically why people are not saving and what it is about our pension system that needs to change over the longer term. Especially if we are going to materially improve public awareness and lift pension saving to a much more acceptable level than seems possible at the present time.
“In essence what we need is:
- A much simpler pension system which is comprehensible to the average person and does not suffer from the complexities of the past
- Better use of language and the elimination of the jargon currently attached to pension communications
- The encouragement of greater consumer engagement with their pension plan and the possible ways it can be facilitated
- The development of a better, more approachable image for the pension industry and the restoration of consumer confidence in it.”