- Three in five UK workers influenced by the quality of workplace pension when looking for work.
- Despite this 59% are unaware of how much their current employer is contributing.
- Workers in IT, finance, transport, logistics and engineering are the most engaged with their pension savings, being most likely to have checked the performance of their savings in the last year, while hospitality, health, leisure and social care workers are the least engaged.
The quality of a company’s workplace pension is a major consideration for job hunters, with nearly two thirds (62%) of UK workers saying it’s a pull factor when applying for a job. One in five (19%) believe it’s essential that their employer has a good offering, while another one in five (21%) consider it a major influence.
Despite the high value placed on a workplace pension, few of those in work are sufficiently engaged with their pension. Three in five (59%) are unaware how much their employer is contributing, and two in five (41%) don’t know how much they’re putting in themselves. With well over half (56%) of those working in the UK relying on a company pension as their main financial lifeline in retirement, and 93% of people across the UK set to miss their retirement objectives, this lack of engagement could have significant implications for UK employers.
The importance of a workplace pension to different professions
Those working in IT are among the most drawn to a quality workplace pension, with well over half (56%) saying it would largely influence their decision when hunting for a job, and only a quarter (27%) claiming it’s of little importance. Those in financial services have similar priorities. Over three quarters (77%) in banking, financial management and accountancy will weigh up the pension provision before shaking hands on a new job, with the rest claiming it’s not a major influence. Conversely, those working in construction and property are less interested, with over half (53%) saying it makes no difference, while one in ten (12%) believe it’s essential.
The engagement gap across the professions
Engineering, manufacturing and production workers are among the most engaged with their workplace pension, with only a quarter (24%) unsure how much of their salary they contribute each month; a similar number to those working in IT (25%). At the other end of the scale, those working in hospitality and events management (53%) and retail (47%) are much less likely to know how much they put in themselves.
Workers in the UK are perhaps understandably much less aware of the contributions their employer makes on their behalf every month. The least likely to know are those that work in education (64%), and retail (67%) where the majority have no idea how much their employer contributes. Workers in engineering, manufacturing and production, and IT, perform relatively well compared to those in other professions, with 42% and 43% respectively.
Angela Seymour-Jackson, Managing Director of Workplace at Aegon UK said: “It’s good to see people taking into account the quality of a pension scheme when considering a prospective employer, especially when over half of those in work are expecting it to be their main source of financial support in retirement. However, our research indicates that some sectors are doing a better job than others of keeping employees engaged once they’ve joined, especially in retail where employers are some way behind the rest of the business world.
“Across the board, employers should think carefully about how they can ensure staff make the most of their pension, and should be speaking to their employees much more regularly about their joint contributions. Traditionally, people have just received an annual statement, which is all too easy to file away and does little to plug this engagement gap. Technology now means 23% of those in work are using online services to review and make decisions about their pension pots2, and now it’s possible to monitor and manage savings via smartphone, this proportion should be a lot higher.”
Notes to Editors
1) Research was conducted by Watermelon on behalf of Aegon. Total sample size was 3000 adults. Fieldwork was undertaken in March 2015. The research was then put through Aegon’s own unique methodology to create a Readiness score. The income shortfall values referred to in the Aegon UK Readiness Report are shown in today’s value and not future inflated values. All figures based on the findings of this research unless otherwise stated.
2) One Poll research commissioned by Aegon, surveying 2,000 UK adults with private/personal and/or workplace pensions, February 2015
Aegon is an international life insurance, pensions and asset management company based in The Hague, Aegon has businesses in over twenty five markets in the Americas, Asia and Europe, and is the Lead Partner of British Tennis. For more information please visit the Aegon website.