Five ways to encourage younger employees to engage with their pension

For those starting out in their careers, retirement can seem a very long way off.

More immediate financial pressures and a focus on career development will feel a lot more important than thoughts about planning for life after work.

It’s no surprise that it's challenging to engage younger people with pensions and retirement. But it’s not an insurmountable task.

It's important to encourage younger employees to take part in planning for their future. And there are steps that employers can take to improve things.

Strike a chord with contributions

The contribution structure you offer is one of the best ways to improve pension engagement.

By offering a matching contribution structure, you can give a simple and effective financial incentive. This can encourage employees (of all ages) to be more involved with their pension. If you don't offer matching contributions, individuals may be put off and spending could simply happen elsewhere.

Giving people an uplift after they reach a certain age or length of service can dissuade or alienate younger employees. It might encourage a ‘set and forget’ attitude which could turn people off pensions for good.

Start early and make it personal

It’s vital that employers inform and educate employees about pensions early on. This gives employees the time to learn and understand the benefits of saving for retirement.

Providers should help employees engage by making pension planning personal. It’s done by providing personalised projections or dedicated customer service support to pension members.

Employers should communicate regularly with their employees about their pensions. This might include changes to contributions, benefits or educational materials about retirement planning.

Investment choice

A great way to reinforce employees’ interest in their pensions is by providing a range of investment choices. If you're able to invest in line with your views and beliefs, it can create a personal connection between your pension and your future.

As well as a well-rounded default investment fund, offer employees the freedom to make their own investment choices. Learning about the options available can be a real catalyst, and if you combine that with the tools to do it with confidence, it can be powerful.

Learn more about the HL Group Self-Invested Personal Pension

The digital age

Young people tend to be comfortable using technology. Shopping, life admin and entertainment all happen in a digital space, so people expect the same for their finances. And in the digital age, well designed webpages and mobile apps are a minimum requirement.

Signpost your employees to online tools and resources, such as retirement planning calculators and online retirement planning tools. These can be an effective gateway for learning how pensions work and what they’re on track to receive.

Visit our calculators and tools

Wider financial wellbeing

Employees joining the workforce may not have the experience to prioritize or organise their finances. Supporting employees with their financial education demonstrates that you care about their wellbeing.

Offer financial education to help employees learn about saving, investing and retirement planning. This can be part of a wider financial wellbeing agenda that supports employee objectives and aligns with business goals.

Provide access to financial advisers – some employees may need more help planning for their retirement.

Learn more about financial wellbeing in the workplace

In summary - five tips to engage younger employees