Editorial: Employees value having a workplace pension. What’s more: young people are more likely to recognise the need for a pension.
A study carried out by HR and employee benefits platform Hibob found that 61 per cent of HR decision-makers thought employees did not care about auto-enrolment, and 58 per cent thought their employees did not really understand the pension being offered to them, while 54 per cent of employees said they “needed” a pension.
The findings suggest that employers underestimate the value staff place on pensions, and perhaps generally on what one might term ‘proper’ benefits.
Over the past few years some companies have shifted towards offering ‘benefits’ such as a free pick’n’mix wall or restaurant voucher cards, as they tried to minimise spending on pensions.
Whether this trend has abated or not, it appears that increasingly, benefits also seem to come in the form of loans – ranging from season tickets and bicycles to rental deposits and mortgages. Perhaps this is a sign of the times, where savings and salary can’t keep up with rises in transport and housing costs, particularly in London.
But I have hope that workplace pensions will again become more important for attracting employees as awareness is raised thanks to auto-enrolment. Workers might also feel encouraged to report poor working conditions or legal loopholes due to the ongoing debate around the gig economy.
How could the prominence of pensions as a factor when deciding on a job be further bolstered? Some have suggested a simple requirement for companies to disclose the pension arrangements in job adverts – along with the salary range people can expect.
While pensions are important, mastertrust Nest has now proposed that the power of auto-enrolment should be used to make people save into a 'rainy day' fund. In a trial, part of the auto-enrolment contributions will go to a savings account, and once a certain level has been reached and maintained, they are diverted to the pension pot, helping the most hard-pressed people build a financial cushion.
The outcome of the trial should be interesting; if it succeeds, it might help lift what is currently a shockingly low savings ratio.
Sandra Wolf is editor at Pensions Expert. You can follow her on Twitter @SandraCWK and the team @pensions_expert.
