PENSIONS
Pensions: a changing landscape
Daniel Taylor, client director at Trafalgar House, explores what employers can learn from UK trust and confidence in the pensions industry
A s the UK pensions landscape of how their employees engage with and trust their retirement plans. Trafalgar House’s latest Trust & Confidence survey highlights both progress and ongoing challenges, offering valuable insights for employers on how to better support the financial future of their workforces. Now in its fourth year, the survey shows rising trust in the pensions industry, yet it also uncovers deep-rooted concerns about whether employees feel confident they are saving enough for retirement. evolves, employers have a unique role to play in shaping the future For employers, this isn’t just about staying informed; it’s about taking proactive steps to bridge the gap between employee trust in pensions and real confidence in long-term financial security. Trust is improving, but doesn't tell the full story The survey’s results show a steady improvement in trust, with the overall score rising to 5.26 out of 10. However, employers should digest this with caution. While fewer people express outright distrust, nearly 60% say their trust in pensions has little impact on how they feel about their retirement savings. This suggests
that, although employees might feel more comfortable with the idea of pensions, many don’t view them as their primary means of financial security in retirement. For employers, this presents an opportunity to enhance their benefits communication. If pensions are no longer seen as the sole answer, how can you help your employees feel more confident about their financial futures? Promoting a more holistic approach to financial wellbeing, including education around supplementary savings vehicles such as individual savings accounts or company shares, could help bridge this gap. It’s crucial to encourage employees to view pensions as one part of a broader strategy for retirement rather than the full picture. Communication is critical – and still needs work One of the most significant findings from the survey is the rising importance of communication. The survey shows a 41% increase in the number of respondents who say clear communication is the most important factor in building trust in pensions. For employers, this is a powerful reminder that how you communicate about pensions can be just as important as the pensions themselves.
Employees are no longer content with vague, jargon-filled statements; they want clarity, transparency and simplicity. And they don’t just want an annual benefit statement. The survey highlights that 46.3% of respondents rated their experience with their pension provider as positive, a significant drop from 54.1% in 2022. For employers, this decline is a red flag. Clear, ongoing communication that engages employees throughout the year, rather than during annual reviews, could help reverse this trend. Furthermore, while face-to-face interaction is still considered the most trusted method of communication, it’s increasingly rare in the pensions space. Employers should look at providing a range of communication options, such as workshops, webinars or one-to-one sessions with pensions experts, alongside digital tools like apps and websites.
The growing need for personalised support
While technology has made accessing pensions easier, it’s clear from the survey that there remains a strong desire for personal interaction when it comes to significant financial decisions. More than half of the respondents (53.3%) said they
| Professional in Payroll, Pensions and Reward | February 2025 | Issue 107 48
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