Young, free and auto enrolled: help staff understand pensions
Pensions are generally the last thing on the minds of young people, trying to involve them in the world of pensions can be a difficult task. It's time to try and change that.
Making sure younger employees are engaged and understand this valuable asset is important in retaining and motivating the younger demographic in the workplace.
A recent study by YouGov showed that 27% of 18-34-year-olds simply didn't understand the pensions system, and 58% said they were unsure they would have enough money to support themselves when they stopped working. The clear disparity between young people and pensions can be solved with the correct process in place to interact them more in their pension and the understand the benefits of having one.
Focus on education
Before HR departments start throwing bundles of pensions jargon at employees, the first port of call should be financial education which fits the demographic, it's not a one size fits all term. It should be catered to the needs of employees who are at different stages in their life, this could be from taking your pension for the pre-retirement workforce, or in this case the pension basics: explaining the terminology, process and benefits. From here, an employee will better understand their options and feel more confident when approaching their pension.
Communication is key
There is no point having a great pension scheme if no one knows about it. From the same study as stated earlier, it was found that 14% of young people who have a pension do not know what type it is. Whether it is legislative i.e. state pension age changes or a change at scheme level such as communicating default fund strategies, communication should be the backbone of a successful interactive pension scheme.
Young people want to be able to access this information in their own time at their own pace, not to be bombarded with information, instead an interactive space which they can visit and review.
It's the best time to start!
Prompting young employees to start their pension as early as possible makes sense to people involved in the world of pensions, but getting this across the workforce is something that can be a challenge.
Most people, and young people in particular, only really want to know about the benefits of their pension and why they should pay into it. Getting the fact across that starting early can make a huge difference to your pension pot should be a priority when it comes to young people and pensions. Showing that contributions from a young age can build up and secure your finances after the world of work is a real selling point, after all, you can only be young once.
Promoting your pension scheme to the younger workforce is often overlooked and the employees who are closer to retirement are prioritised, don't forget that many millennials do not fully understand the world of pensions and require not only pension communication but education as well!