When you think about a company benefits scheme, what comes to mind? It might be health insurance, shopping discounts or an Employee Assistance Programme (EAP). But have you considered your workplace pension as part of your benefits package?
Although you’re obliged to offer a workplace pension, it’s important not to let it languish. As we’ll explore in this blog, your pension scheme can be a powerful part of your benefits strategy. With a few engagement techniques, you can help your employees get the most out of it – and understand and appreciate your investment.
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Why are pensions underappreciated?
The word ‘pension’ can trigger a range of reactions. For some people, saving for the future can feel like a low priority compared to dealing with today’s needs; for others, pensions can seem too complicated to understand. And for some employees, being automatically enrolled into the scheme is the first and only time they engage with their pension at all.
However, there’s a powerful reason for employees to engage with their pension. A pension is a long-term savings method that helps employees grow a healthy pot for their retirement. With a combination of employee contributions, your employer contributions, and tax relief, the pot increases over time, and investment helps it snowball through compound interest. It’s therefore an important part of preparing for retirement by ensuring they have enough money to see them through those post-working years.
How can your company pension benefit your employees?
Your pension scheme is a fantastic benefit that can lower employees’ financial stress. As employees get closer to retirement, worries about future finances can soar. Your investment into your employees’ pension pots is supporting them in a tangible way, beyond the workplace. Lowering financial stress can therefore have a big knock-on impact on overall wellbeing both inside and outside work, including raising productivity.
How can you maximise your pension scheme as a benefit for employees?
Offering a simple pension scheme is the starting point, but to help improve the benefit for employees, you could consider the following:
1. Increase your employer contributions
If you can afford to put more into their pots, you’ll be giving your employees even more support for the future. You can do this as a simple increase, or you could introduce pension matching, where you put in more if employees also raise their contributions. Either way, this is a greater investment that can make a real difference.
2. Encourage employees to increase contributions
Some employees may not know or have ever thought about raising their own contributions. Doing so can further increase their pot, bringing them closer to a comfortable retirement. A matching scheme could be one way to do this, although you’ll need to deliver education alongside to make sure employees know how to take advantage.
Or, if you can’t yet afford to match, giving employees the tools to map out their financial future and digitally increase contributions (like Maji) can empower them to take prudent decisions.
3. Put the pension in context
Offering wider financial education and wellbeing support can help employees understand their pension as one part of their whole life strategy. For some, this might mean going back to the basics of budgeting and saving, while for others, they might be in a position to think about more complex strategies for the future. The advantages? Employees will appreciate your pension scheme in the context of their holistic finances, can make more informed decisions, and ultimately feel less stressed.
4. Consider financial coaching
A financial coach can help employees understand your pension scheme offer and get the most out of it. For example, they could support with budgeting in higher pension contributions, or get employees to fully explore the impact of salary sacrifice. When this extra benefit is rolled into a one-stop financial wellbeing platform like Maji, your employees can also share their digital plans with their coach to map out their path to retirement.
This is especially vital for higher earners, those earning around £100,000 and above, who often face hidden pressures despite their income. You can read more here about how financial coaching can benefit the higher earners in your workforce.
5. Switch to a salary sacrifice pension scheme
Salary sacrifice isn’t just an alternative way of making pension contributions – it’s a smart, cost-effective upgrade that can benefit both your employees and your business.
Salary sacrifice for pensions is an arrangement where an employee agrees to give up (or “sacrifice”) part of their gross salary, and the employer pays that same amount directly into their pension instead of paying it as wages.
Because the contribution is taken from gross pay (before income tax and National Insurance are calculated) both the employee and employer save on National Insurance contributions.
3 reasons to consider a salary sacrifice pension arrangement
1. It’s fast to set up
We can get your scheme live in under an hour. Our team handles most of the heavy lifting, so you can start delivering tax-efficient pension savings to your workforce almost immediately.
2. You keep your current pension provider
Salary sacrifice works alongside your existing pension scheme, so there’s no need to move providers or overhaul your benefits infrastructure. This means minimal disruption and no lengthy transfer process.
3. We manage compliance for you
National Minimum Wage rules can make salary sacrifice tricky to administer, but Maji’s platform ensures your scheme stays fully compliant without creating extra admin for your HR or payroll teams.
Switching to a pension salary sacrifice scheme might sound complicated, but with Maji, it’s quick, compliant, and delivers big wins for both your business and your employees. If you’re interested in a more detailed run down of how pension salary sacrifice works, you can visit this blog for more information.
Get started with optimising your workplace pension
Your pension scheme might be underappreciated right now, but with a few small tweaks, you can help your employees understand, engage with, and benefit from this important product.
Maji’s platform keeps employees informed with helpful guides, interactive planning tools, and the power to model and adjust their contributions – at the same time as exploring other aspects of their financial lives.
If you’d like to learn more about how Maji can help your pension scheme shine as a benefit, reach out to the team for a quick demo.
