UK businesses that actively engage employees with their pensions are seeing stronger financial performance, according to new research from Scottish Widows.
The Retirement Realities: Unlocking the Workplace Benefits report found that two-thirds (64%) of businesses that take an active role in pension education reported “very good” financial performance.
By contrast, where firms do not promote pension engagement, only 18% rated their financial performance as “very good”.
Firms offering higher employer contributions also perform better. More than two in five (41%) companies contributing over 8% of salary to employee pensions said their financial performance was “very good”, compared with just 19% among firms paying lower rates.
Only 11% of high-performing firms make the minimum 3% contribution required under auto-enrolment.
Graeme Bold, managing director of workplace and intermediary wealth at Scottish Widows, said: “Workplace pensions are a powerful yet often overlooked way to shape employees’ long-term financial wellbeing. By investing in pension engagement, employers are not only supporting their people’s futures but also unlocking stronger financial performance today.”
The research, produced in partnership with Opinium, surveyed 1,000 senior decision-makers responsible for pensions and 2,000 employees.
It also found a link between broader benefits and business outcomes. Over half (51%) of firms offering healthcare, 48% offering enhanced maternity leave and 39% offering paternity leave above statutory levels reported strong financial performance.
Retention boost
Almost nine in ten (88%) employers believe pension-related benefits directly influence their firm’s financial performance, while 91% said they play an important role in attracting and retaining talent.
However, nearly a third (29%) of employees who are unhappy with their workplace pension have already left or are considering leaving their job, with 68% citing a lack of competitive pension provision as a key reason.
Bold added: “We are in the middle of the industry-led Pension Attention campaign, which is a great opportunity to keep pensions high on the agenda.
“But engagement needs to be ongoing. Technology now makes it easier for employees to track and manage their pensions anytime through apps like ours, which put retirement planning at their fingertips.”
