How to help employees save more into their pensions

Pensions can be a paradox: super important for our futures, but something a lot of us just don’t want to think about. After all, saving for the distant days when we’re old and grey can feel, well, boring – and difficult, if we have lots of competing needs demanding our money right now. 

But, as an employer, helping your employees save more into their workplace pensions can be a really important way to help them prepare for their futures. It can also maximise the value of the huge benefit you provide in the form of employer contributions. 

So, how can you encourage employees to save more into their pensions? In this blog, we’ll give you some tips to help your employees build financial wellbeing for the future.

Why should employees consider saving more into their pensions?

A pension pot is one of the best ways for employees to save for retirement. Not only is this long-term form of saving (and investment) a great way to grow their money through the accumulation of interest over the years, they get the added bonus of tax relief from the government and money from you in the form of employer contributions. 

Although there are legal minimums for employer and overall contributions into the workplace pension pot, there is no maximum that an employee can put in. Employees can choose to increase their contributions in order to:

• Build a bigger pension pot, faster: Most people need to build a sizeable pot for the future – a single person needs an estimated £31,300 a year for a moderate lifestyle in retirement. So if a person were to live for 20 years in retirement, they’d need a pot of £626,000! And many people will live longer than that once they stop working. Saving more, over a longer period of time, simply equals a better life in retirement.
• Take advantage of matching schemes: Many employers promise to match their employees’ contribution levels instead of sticking at the minimum  e.g. moving 5% employee and 3% employer -a common way to meet the legal requirements – to 5% and 5%, or more if the employee puts more in. This is another great way that employees can build a bigger retirement pot.
• Feel better about the future: Employee financial wellbeing support is all about helping colleagues feel more in charge of their money, and more relaxed about the future. With pension worries soaring in today’s high-cost-of-living age, supporting better planning and more timely savings can give employees a boost in confidence. 
• Get the most out of salary sacrifice: As employees sacrifice more, they can reduce their NI contributions, adding more take-home pay at the same time as building a bigger pension pot. Some employees may also be able to duck below tax thresholds through sacrificing more, too, ultimately saving themselves significant amounts. 

As an employer, it’s good to know that when employees increase their contributions in salary sacrifice, you also save more in NI, too.

Traditional ways to help employees save more

Just like general pension engagement, there are traditional and digital ways to make this subject come alive. Traditional methods might include:

• Leaflets and posters explaining the benefits of saving more.
• A lunch and learn session where you can explain and demonstrate how an increased contribution now could lead to a much better retirement. 
• A dedicated inbox for employees to request payroll changes and ask questions. 

These methods can rely on you having the time and resources to support employee education, the understanding to help them model the impact, and the capacity to process change requests. 

Digital ways to help employees save more 

Digital tools can help you scale pension education and contribution increases without overloading your internal teams. These might include:

• An employee benefits portal with pension modelling features.
• Online calculators that show the long-term impact of saving more now.
• Automated email nudges or in-app prompts at key moments, such as pay review season or birthdays.
• Access to recorded webinars and interactive content to educate at scale.
• Online forms to simplify the process of updating contributions.

These digital methods reduce the need for manual admin, offer personalised insights at scale, and support employees in taking confident action, when and where it suits them.

How Maji can help

Using a digital platform like Maji can make it much easier for employees to raise their contributions. With Maji, they can:

• Model the impact of changing their contributions on their final pension pot, potential annual income, and current take-home pay. 
• Request changes through a simple button click.
• Access a range of educational resources including interactive webinars and 1:1 coaching. 
• Use the live chat to ask the expert team if they have any questions. 
• Use the budgeting tools and shopping discounts to make sure they can put more aside comfortably each month. 
• Use Maji’s Pension Builder programme to easily grow savings over time.
• Work with a coach to visualise their future, create a plan of action to achieve it and be held accountable over time to take the steps that matter

Maji also makes it easier for you to manage change requests, with exportable data you can share directly with your payroll team. 

Maji’s innovative approach has led to a remarkable outcome for its users: 70% of our clients’ employees are on track to hit pension contributions of 15%. This is a significant improvement compared to the general UK market, where a recent report showed that 44% of employees could not afford to increase their pension contributions.

If you’d like to learn more about how Maji can help your employees build a bigger pension pot, feel more confident about the future, and make the most of the pension benefits you provide, schedule a quick demo.