PENSIONS
Show your pension some attention
Mark Smith, head of media and saver engagement at the Pensions and Lifetime Savings Association (PLSA), offers advice on how to help staff understand – and love – their workplace pension
T here are almost 20 million people currently saving into a workplace pension – equivalent to two-thirds of the UK workforce – and 40% more than when automatic enrolment was launched in 2012. That’s a fantastic and welcome transformation of the nation’s retirement savings in little over a decade, and one built on consensus and collaboration between everyone involved in pensions. But engagement with pensions is still too low. More than half the public struggle to find their pension information and only 20% are confident they are saving enough for retirement. Against a backdrop of rising prices and falling living standards, it’s never been more important to ensure employees are engaged with their pensions and are reassured about their long-term financial wellbeing. At the Pensions and Lifetime Savings Association (PLSA), we strongly believe that people who are more engaged with their pension are not just more likely to make better decisions about how to manage it, they will also feel more confident about their future. Employers have an important role to play in helping their members and staff with their financial wellbeing today, to provide
the foundations for a healthy financial wellbeing in retirement.
and downs of the market l whether your organisation contributes more than the legal minimums or offers a contribution matching scheme l where to find more information. Tell them which member of staff can help with their questions, direct them to your provider’s online portal and let them know that free, impartial and easy-to- understand information is available via the government-backed MoneyHelper website. Cost-of-living guidance Helping employees with their financial wellbeing doesn’t stop at offering information about the workplace pension. You can give employees confidence, engender trust and demonstrate your investment in their life outside of work by giving more holistic guidance in their financial lives. The PLSA has produced Cost of Living Guidance , which, although aimed at pension schemes, is very useful for employers too. It sets out practical ways you can support employees with the cost- of-living crisis. It includes signposting to mental health resources, basic budgeting support, government benefits and ways to safeguard against scams. It also suggests
Start with the basics It might seem obvious to anyone working in payroll and human resources, but surprisingly few people understand that they are automatically enrolled into a workplace pension, or that their contributions are boosted by their employer and the government via tax relief. Think about what communications you can provide your staff to teach them how this little understood benefit helps them. Financial information can be overwhelming to many so avoid jargon and start with the basics. You can start by telling them: l why saving for retirement is important l they are probably already paying into their workplace scheme (unless they have opted out) l what type of scheme they belong to and who their pension provider is l if in a defined contribution scheme, how much they contribute, how much you, as their employer, contributes and how tax relief helps boost these amounts l their money is invested in a broad range of different assets so that it both grows over time and weathers the ups
| Professional in Payroll, Pensions and Reward | September 2024 | Issue 103 54
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