As auto-enrolment is rolled out across the UK, employers agree almost unanimously that they have a part to play in supporting employees with their workplace pension, with 68% feeling a greater duty of care as a result of the reforms. But according to new research from Aegon UK, 95% of UK businesses are encountering hurdles that prevent them from doing so.
A quarter (27%) see time as the biggest barrier to supporting employees with their workplace pensions, while another quarter (23%) feel restricted by the associated costs with monitoring and training. Overall two thirds (67%) feel held back by a shortage of time and resources. When stacked up against other back-office business objectives, one in five (21%) don’t see workplace pensions as a priority. In fact, encouraging pension engagement in the workplace came 9th out of 10 key HR responsibilities, far behind staff welfare, health and safety, and payroll, and behind staff training and the maintenance of employee records.
When it comes to improving pension engagement in the workplace, a resounding two in five (39%) employers believe interactive digital tools would be the most effective approach. Another two in five would like more onsite training by financial advisers (22%) or workplace consultants (17%), while a further 15% think their pension provider would be best placed to fulfil this role. Only one in 20 businesses would like to see further government intervention plug this engagement gap.
Angela Seymour-Jackson, Managing Director of Workplace Solutions at Aegon UK, said:
“Now in our third year of auto-enrolment, it’s reassuring to see nearly all businesses taking their role to offer proper employee support alongside a company pension seriously. However, it’s clear that not all are in a place to dedicate the time and resources needed to get their workforce ready for retirement. As the programme is rolled-out to the UK’s 4.9 million businesses with under 50 employees, it’s vital that employers are properly armed to overcome the saving inertia associated with auto-enrolment.
“Many employers feel digital solutions are the answer, alongside greater training and support from advisers, consultants and their pension provider. We’ve seen growing popularity for services like our own Retiready, which aim to reduce the burden for employers, and increase engagement by employees. Individual guidance and coaching for employees can also be a great way to educate them about their retirement income. Everyone in the sector has a part to play; only now, it’s the businesses themselves that have the power to drive real change.”