The Importance of Pension Education in the New Financial Year
As we approach the start of a new financial year, it is important for employees to assess their pensions and ensure that they are on track to meet their retirement goals. However, some employees may not be aware of the importance of pension planning or where they should start.
Many employees assume that their pension scheme will provide them with enough funds to retire comfortably. However, this is not always the case. Building awareness around pension scheme benefits, additional retirement benefits, personal statements etc, is key for empowering staff to make educated decisions about their futures.
To help, employers must play a key role in encouraging and supporting their employees to evaluate their pensions. In this blog, we will explore why employers should encourage their employees to assess their pensions and provide sustainable ways for them to achieve financial security at retirement.
So why should employers offer pension education for their employees?
1. It helps to improve their financial wellbeing.
Looking after the financial wellbeing of employees is key to fulfilling an employer duty of care to protect staff amidst the ongoing financial crisis. Everyday costs are soaring more than ever, so employees need ways to inflation-proof their savings and make their money work harder for them.
Pension contributions become less of a priority for staff when they’re trying to meet day-to-day costs, but this puts them at risk for the future. Retirement education gives them the knowledge to make the best financial decisions for their circumstances.
2. It empowers them to create a happier retirement.
Understanding your pension is an important part of retirement planning. By reviewing their pension contributions, projected retirement income and pension savings options, employees can gain a better understanding of their retirement prospects and make informed decisions about their finances. It’s important to encourage staff to take steps to ensure that their retirement is secure.
3. It improves recruitment and retention difficulties in the workplace.
Ongoing recruitment and retention issues are just a couple of the resulting hurdles for employers to overcome because of the cost-of-living crisis. Minimal pay rises aren’t enough for employees to feel supported by their employers, so more long-term solutions to enhance employee financial wellbeing are essential for a happy workforce. Employees want to feel like their employer has their best interests at heart.
The importance of pensions cannot be overstated. Here are some tangible ways for employers to actively support employee pension education as we approach the new financial year:
Provide webinars or workshops to help employees fully understand the benefits of their pension scheme and how best to manage their retirement savings.
Review and/or expand the retirement benefits on offer for their workforces. Make sure employees are aware of any cost-effective savings methods for their pension contributions.
Communication! Reinforce the importance of pensions in the workplace and encourage employees to take an active interest in their retirement planning. For example, employers can make pension contributions more visible to employees by including them on payslips.
Offer financial planning tools such as calculators or 1-to-1 meetings to help employees understand how much they need to save for retirement and how much they will receive from their pension.
Make online resources available such as videos or articles on retirement planning - easily accessed by employees at their own convenience.