By Martin Palmer, Head of Corporate Benefits Marketing, Friends Life
Furthermore, as the latest ONS data shows signs of improvement to the UK economy, there is a clear sense of optimism not only in the financial services sector but also amongst the general public, as exemplified by the significant growth in the retail sector in July.
However, as the economy shows signs of recovery, there is a danger of complacency setting in when it comes to retirement planning. For those already enrolled in a pension scheme, the temptation to allow contributions to remain at the minimum required levels will be hard to resist and, once again, saving for retirement could fall back down the ever growing list of priorities.
Also, it is unlikely that levels of take-up will remain as high going forward. Smaller organisations yet to start auto enrolment are unlikely to have the resources to engage with staff about pensions and may be reluctant to encourage take up of schemes because of the extra cost to the business. Furthermore, when the minimum contribution rises from 1% to 4%, it remains to be seen whether at that point some workers will elect to stop making contributions.
Further, pension savers need encouragement to consider increasing their contribution levels above the minimum leveles, where they can afford it. Members need educating so as to avoid falling into a false sense of security around auto enrolment, engaging with their adviser or provider planning tools to make decisions will help to ensure they have the best possible retirement outcome. Employers also need to ensure that all employees have the relevant tools in place to help their staff track and monitor their pension and make effective planning decisions.
That’s why at Friends Life, we’ve been looking at news ways to solve the problem of employee engagement. We’ve found that technology and social media offers new ways to communicate with employees in an efficient and interactive manner. Through the managed and controlled use of digital tools, many of our clients are finding that online portals offer an innovative yet valuable method of facilitating open and honest communications about pensions and other workplace benefits with their employees, whilst also providing a platform to deliver financial information.
Pension providers are not famed for being the first to adapt new technologies and initiatives but increasingly, as an industry, we are finding that as technology and media evolves, they offer a solution to some of the pension engagement quandaries that have faced the industry in recent times. As unlikely it may have seemed, our experience shows that online communities could be the answer to cracking the pension engagement code and ensuring that the current high take up in pension schemes remains high as mid and small size firms begin the auto enrolment process.
With the first wave of auto-enrolment inductees reaching their one year anniversary, the high participation rates are of course very promising. However, let’s not get carried away yet. There is still a long way to go with pension engagement and now, more than ever, we need to look at new, maybe unusual, but innovative and effective ways to ensure that workers have all they need to prepare for a comfortable retirement.
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