Engaging with pensions: 7 ways to get your employees onside

In football, owners and managers need to motivate their squads. The same is true of pensions, even if they don’t inspire the same devotion…

There’s a new football season just around the corner, and you probably have more than a few employees who won’t need much encouragement to keep up with the twists and turns of the 2019/20 campaign. Pensions, however, rarely get the pulse racing in the same way. But the end result is certainly no less important – and helping employees to engage with their pensions pays dividends for employers, too, not least in helping them to recruit and retain the right team members.

If you’re looking to help your employees keep up with the game, here’s 7 tips to encourage them to engage with their pensions.

1. Get off to a winning start 

It’s worth taking a look at your induction processes to make sure they cover workplace pensions in depth at the earliest possible stage. As well as dealing with this subject verbally, try to include details in an information pack for new employees to take away – and make sure the language is as straightforward as possible without unfamiliar pensions jargon. You also need to signpost where new members can go for support and further explanation of the facts.

2. Embrace the technology

Thankfully, the use of technology in the workplace is a great deal less controversial than on the football field. Like VAR, pension calculators won’t make every decision easy – but those who use them say that once they’ve seen the potential effect of increasing or decreasing their payments they reach a new level of understanding. Adding a comparatively small amount to their contributions could make the difference between a top of the league retirement and one which is struggling to keep up.

3. Get the coaching right

Hosting financial education seminars is a good way to get people thinking about their future. This is about far more than helping employees to get the basics right when it comes to understanding their schemes. You could recruit pension providers and other professionals to help employees to look at their finances in general, rather than concentrating solely on pensions.

When they’ve seen the ‘big picture’, many employees will feel inspired to take a more active role in planning their long-term futures. We need to combat the temptation to think auto-enrolment means automatic financial security. Instead, employees should be thinking about the amount they’d need to give them the lifestyle they really want in retirement. And, like football, those who invest the most tend to come out on top in the end.

4. Make sure they’re on board with the project 

The team talk is crucial. To keep employees switched onto the benefits their workplace scheme offers, they need to be reminded of the facts on a regular basis. Employers might well need to tell employees what they are going to tell them, then actually tell them, and then tell them again for good measure. And it’s worth considering using different media to let them know about it.

5. Peak at the right time

It’s not just a matter of what you tell your employees, or even how often you tell them. It’s also about when you tell them. Even the most committed of providers couldn’t pretend that pensions are the most interesting thing your employees will read about all year – and some months bring more distractions than others. You might be tempted to go for a communications ‘big kick-off’ in August, but remember many employees will be more focused on having fun than choosing funds. And for many, December is obviously the time when long-term thinking tends to take a mid-season break.

6. Different players respond to different approaches

Any good manager knows that you won’t get the results you want if you try to communicate with every team member in exactly the same way.

•  With younger workers, concentrate your communications on saving in general – the word ‘retirement’ is likely to be a turn-off. The pensions scheme should be positioned as a part of the whole package you offer – and don’t forget to emphasis the fact that you pay into their pot as well as themselves.

•  When you’re talking to employees aged 30 to 50, acknowledge the fact that they’re likely to be dealing with more immediate concerns such as the expense of raising a family. Pension support should be part of your service to help them make the most of their money.

•  Employees who are closer to retirement will be more aware of the need to plan for it. You can support them by encouraging them to think about the decisions they need to make from age 55.

7. Keep it simple

Finally, telling employees a few straight facts is the best way to get them to engage more fully with their pension. Remind them that:

•  You put money into their pots – it’s not all down to them.
If they opt out, they won’t benefit from this.

•  It’s their money – when it goes in, and when it comes out
. Currently, from age 55, they can take a quarter of it in cash, tax-free.

•  Tax relief can amount to a 25% top-up for their savings.
You can get this across by explaining that for every £80 a basic rate taxpayer saves in the workplace pension, £20 is added from tax relief. That’s 25% extra – instantly.

It’s in everyone’s interests to help employees keep their eyes on the ball with their pensions. Good luck motivating your team!

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