How using payslips could engage employees

Nearly three-quarters of unpensioned workers – those in the private sector who do not pay into workplace pension – feel confident about handling day-to-day financial decisions, found a survey of almost 2,000 people by the National Employment Savings Trust.

The research also showed 86 per cent of this group check every payslip, and items that are not seen as immediate essentials are being squeezed out of the family budget.

In response to some of Nest’s findings consultants have called on employers to: 

• Use payslips to get messages across to employees.
• Communicate about any auto-enrolment changes well in advance.
• View pensions as part of an overall financial package and not in isolation.

Unpensioned workers account for 68 per cent of those in the private sector, according to Office for National Statistics figures.

A spokesperson for Nest said the research would help guide its approach in a number of areas including investment, use of language, member and employer guides and website functionality.

"We are continuing to develop and evolve our approaches to reflect what the research is telling us and based on the direct experiences of our members and employers," the spokesperson added.

"One example of work in progress is how we talk about investment to members.”

Andy Cheseldine, principal at LCP, said that one of the communication tactics suggested by the report was to use payslips when engaging with members.

He said: "We know that the majority do actually look at their payslip, so if you want to get a message across to an employee that is the place to write it."

If members were told that they could increase their pensions contributions a year in advance they would be more likely to react positively to the idea than if they were only told a month before, he added.

Those not already in a workplace scheme may be encouraged to stay in one if employers see pensions as part of a bigger financial picture.

"When we are talking to employers we ask them to look at pensions as part of the overall financial package for employees," said Kevin LeGrand, principal and head of pensions at Buck Consultants.

"And indeed when they are looking at their wealth they need to look at their total wealth and not just pockets of it in isolation."

Other findings from the Nest report looked at employer readiness, and showed that only 74 per cent of the largest employers have confirmed a provider for all their workers.

Among employers with fewer than 5,000 workers, less than half have confirmed their provider.