Getting your employees to engage with their pension can put them on the road to having a happy, more comfortable retirement when it comes around. Yet far too few are giving how much they are saving enough attention – particularly younger workers.1

Challenges such as the cost of living crisis might be impacting how your employees are managing their immediate finances, and may play a part in their lack of future planning. However, other consistent blockers could be playing a role as well. We outline the emotional and practical blockers that might be stopping your younger employees from saving and engaging with their pensions – and highlight ways you can help them to overcome this.

Savings challenges – and how to help

So what’s stopping your younger employees from saving for their future? Here are a few factors that could be putting the brakes on things, and some suggestions on how to support them.

Lack of confidence

Many young people don’t feel confident planning their financial future. They also find it harder to think far ahead in general. Only 34% of those aged 18-34 know where they want to be financially in 10 years’ time.2 This could mean they get put off starting and don’t even try to plan ahead.

One of the key things you could do to help your workers overcome this challenge is to offer financial advice as a workplace benefit. Our research found that people who currently use, or have previously consulted a financial adviser felt more joy, satisfaction and peace with respect to their finances.3 So, offering this kind of benefit to employees could help them better visualise their future and financial goals, and give them the confidence to start getting organised. It could also help them feel more confident about their money in the here and now.

If you’re unable to offer direct financial advice, make sure to highlight where they can find it, by pointing to a resource such as MoneyHelper. There’s likely to be a cost for this advice. Our Advice Makes Sense Hub can also support employees with taking their first steps in getting advice.

Breaking saving down into smaller steps – and showing your employees how to go about it – could also help. Planning for the future can be a lot more manageable with a checklist of smaller tasks to tick off, as that way it might not feel as overwhelming.

Misalignment of values

There’s evidence that today’s younger generations want to save with a conscience, but because of a lack of transparency, many are concerned that the pension saving options open to them don’t align with their values.4

This challenge can be overcome by showing them where their money is being invested and helping them find out more – in other words, by being more transparent. This might be especially important if your young workers want to have more of a hands-on role in their investment decisions, over and above the default fund option. And even more so for employees with environmental, social and governance (ESG) considerations in mind.

You can help employees with this by encouraging them to activate and log in to their online pension accounts, where they can access fund factsheets and key investor information that provide a full breakdown of the funds their money is invested in. You can also help them learn more about responsible investing on our Responsible investment hub.

Priorities in the present

Many younger workers might simply be failing to save because they view retirement as being too far away to worry about. With other immediate demands on their finances (such as buying a home or the rising cost of living), short-term goals might be taking priority.

It’s of course important for employees to think about the here and now. Focusing on their immediate finances could make sure they have both the headspace and resources to think about saving for the future. To help them, you could point your employees to budgeting tools, or articles like Which budgeting method is best for you? so they can find a money management method suitable for them.

This doesn’t mean you can’t also encourage employees to think longer term. If you support them with managing their money in the present, this could create saving habits that benefit them in the future.

Try to explain the benefits of contributing to a pension from a young age. Point them to helpful online resources for further information, like our article 5 reasons to be proactive with your pension, or MoneyHelper’s Why save into a pension?. A key draw of contributing early could be the benefit of compounding (growing their money over time). However, remember that the value of an investment can fall as well as rise and isn’t guaranteed. The value of a pension pot when the employee comes to take benefits may be less than has been paid in.

It’s important to be mindful of the fact that, in the current climate, some employees genuinely won’t be able to contribute more than the minimum into their pension.

Mental health and financial wellbeing

Many of the younger generation feel worried about money in general. They might often feel that it simply isn’t possible to put money aside to save, particularly as younger workers typically have lower average salaries. This can be exacerbated by – and in some cases can contribute to – any mental health conditions they may be experiencing, which could leave people stuck in a cycle of poor financial management.

One way to help them overcome this could be to signpost employees to extra support. Organisations and charities such as Mind have plenty of resources to help, or you might already have workplace wellbeing benefits in place too. You could also ease any anxieties around pension management by showing them how simple it can be, giving them the tools they need to feel more in control of their finances without it needing to be complex.

Support their aspirations

Saving for a pension is never easy, which is why it could be helpful for pension education and financial wellbeing to become a core part of your company’s ethos. Use external resources such as our financial wellbeing hub for a range of resources that can help employees to picture their future selves and become a financial wellbeing all-rounder. You’re not expected to have all the answers in-house – so bring in the experts where you can for additional support.

Ultimately, by giving your employees the right support, tools and education, you can help them overcome any blockers they may be facing – and give them the best possible chance of having the retirement they aspire to.

  1. Financial lives 2020 survey: the impact of coronavirus. Page 164. Data source, FCA, February 2021.
  2. 24 million UK adults don’t feel confident managing their money. Money and Pensions Service, November 2021.
  3. Financial wellbeing research conducted by Aegon’s Centre for Behavioural Research, August and September 2021. Conducted with 10,021 UK residents.
  4. What are ethical pension funds? Research carried out for Nerd Wallet by OnePoll, September 2021. Conducted with 1,612 UK adults.



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