[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries
.

Over half of businesses not personalising pensions

UK firms are struggling to engage staff with their pensions, with 57% admitting they do not personalise information for individual employees.

08 AUG 2017 | CHRIS SEEKINGS
Web_pension_istock.jpg.jpeg
Staff missing out on savings ©iStock

That is according to research published today by LifeSight, which shows that 97% of companies are currently experiencing significant pension inertia within their workforce.

As a result, many employees are opting to stay in default investment funds, and stick to standard contribution rates – potentially missing out on matching savings from their employer.

“With the recent increase in the state retirement age to 68, many employees will need to take a much more proactive approach to saving if they want to retire well or earlier,” LifeSight head of proposition development, David Bird, said.

“Providing engaging online tools which make saving decisions more relatable can help nudge them into action, for example by helping them understand how it impacts the age at which they can retire.”

The research is based on the responses of over 100 UK-based organisations that attended Willis Towers Watson’s (WLTW) Pensions and Savings Annual Conference in May this year.

It was found that putting money away for a house or holiday is the biggest barrier to pension saving, with 56% of employers recognising it.

One-in-five suggested that the complexity and lack of understanding of the reward on offer was the main reason, while 17% suggested it was an affordability issue.

WLTW director, Richard Veal, believes that the use of modern technology could also help improve staff engagement, and address the current “pension paralysis” in the UK.

“In 2017, there is no reason why the pensions industry should be lagging behind with outdated communication methods, such as paper statements and brochures,” he said.

“By analysing behavioural patterns underpinning saving attitudes and strategies, using modern technology and making pensions more relatable, the industry can become better enablers of pension saving decisions.

“With their significant access to and influence over the UK’s workforce, employers can also play a crucial role in driving engagement and ultimately help guide their employees to financial security in retirement.”


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession