A majority of UK employers are not personalising pension communications and a third have no intention to play a greater role in helping staff save for retirement, new research shows.
Putting money away for a house or holiday was seen as the biggest barrier to pension saving by employers, with 56 per cent recognising it, according to a study of over 100 organisations conducted by LifeSight, Willis Towers Watson’s master trust.
One in five employers suggested that the complexity and lack of understanding of the reward on offer was the main reason for not saving beyond the minimum, while 17 per cent suggested it was an affordability issue.
But 57 per cent admitted their pension communications are not personalised for the individual and 37 per cent said they currently have no plans to play a greater role in the long-term savings of their employees.
LifeSight head of proposition development David Bird says: “Employees focusing on short-term savings is a common challenge. Personalised pension communication could be an important way of addressing inertia in pension savings.
“With the recent increase in the State retirement age to 68 for many, employees will need to take a much more proactive approach to saving if they want to retire well or earlier. Providing engaging online tools which make member’s 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.”
Towers Watson line of business leader (UK) reward, talent, commumication and change management Richard Veal says: “In 2017, there is no reason why the pensions industry should be lagging behind with outdated communication methods, such as paper statements and brochures. 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. Good communication with employees will be critical in overcoming the UK’s current pension paralysis.”