Companies that actively engage employees with their pensions also experience stronger financial performance, according to new research by Scottish Widows.
The pension provider’s report, published this week, revealed that companies are more likely to outperform their peers financially if they encourage their employees to contribute more than the default minimum to their pensions, as well as offering generous benefits packages.
The 29-page report found that 64% of UK businesses that take an active role in educating employees on pensions reported ‘very good’ financial performance.
In contrast, the quality of financial performance dropped significantly, with 18% reporting this as just ‘okay’, in instances where firms did not play an active role in promoting colleague pensions.
“Our data shows that by investing in pension engagement, employers are not only supporting their employees’ future, but also unlocking stronger financial performance today.”
Graeme Bold, Scottish Widows
The study also found that companies that paid more into their staff’s pension pots were also more likely to outperform financially.
Just 11% of well-performing firms paid only the minimum 3% default contribution required under automatic enrolment.
Graeme Bold, managing director for workplace and intermediary wealth at Scottish Widows, said: “Workplace pensions are a powerful – yet often overlooked – way to shape employees’ long-term financial wellbeing.
“Our data shows that by investing in pension engagement, employers are not only supporting their employees’ future, but also unlocking stronger financial performance today. This helps to set the foundations for an engaged and productive workforce that attracts and retains top talent.”
The findings were based on a survey conducted by research agency Opinium, which gathered insights from 1,000 senior decision-makers responsible for pensions at their firms and 2,000 employees.
This relationship between benefits and performance is not limited to pensions, Scottish Widows found.
Firms offering more generous non-pension benefits were also more likely to report strong financial performance. The data found that 51% offering healthcare, 48% offering extended maternity leave, and 39% offering paternity leave above the statutory minimum also experienced comparatively better financial results.
