Demand for pension engagement among employees highlights opportunities for advice in the workplace

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  • 54% of employees believe their employer has responsibility to help them plan for retirement but 75% feel they aren’t being actively encouraged to check their workplace pension during working hours.
  • Nearly three quarters of employees would welcome their employer allowing 15 minutes each month to check their workplace pension during work hours.
  • Need for advice presents adviser opportunities to nurture personal advice prospects in the workplace.
  • Aegon’s own experience in the workplace shows a 30% uplift in employee engagement when the employer promotes pensions to their workforce.

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 the 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.

But if their employer 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. However, when asked how often they thought they needed to check their pension, many (40%) said quarterly would be sufficient.

Aegon believes more employers should be encouraging employees to engage with their pensions in the workplace, partly so that workers have greater appreciation of this valuable benefit from their employer.

In addition, 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
  • 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.

“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.”

How advisers can help employees save for retirement in the workplace

From April 2017 advice should become more accessible and affordable for consumers and for employers to offer via the workplace. Two new initiatives will start the ball rolling, the new £500 pension advice allowance, and the increased employers’ NI and tax exemption for advice provided in the workplace, which rises from £150 to £500. This gives advisers new opportunities to offer advice services.

  1. Offer workplace seminars covering the value of pension saving and advice
  2. Help employees to set and review retirement income goals
  3. Help employees to review what contributions they can afford
  4. Review investment choices in line with risk appetite
  5. Get employees online and familiar with their employer’s pension scheme
  6. Encourage people to start planning early for retirement
  7. Explain to employers and employees how they can pay for advice

How employers can help their workforce make the most of their workplace pension

  1. Pension promotion. Regularly promote your pension scheme in the workplace and highlight the value of pension saving.
  2. Encourage employees to check their pensions. Make employees aware that it is ok for them to check their pension online during work hours.
  3. Advertise advice. If you offer a workplace advice facility, remind employees of this, the increase in the NI and tax exemption, and how they can access it.

Notes to Editors

  • Research was carried out among members of Aegon UK’s consumer and customer panels between 24 and 30 August 2016. Sample size: 386