Our research delves into the landscape of workplace pensions and benefits within SMEs.
We are excited to announce the launch of our new SME Workplace Pensions and Benefits Research Report.
The report sheds light on a significant issue: a substantial number of small and medium-sized businesses (SMEs) are failing to fully maximise the benefits of employee workplace pensions, leaving potential retirement savings untapped.
Based on a comprehensive survey involving 500 SME employers and 500 SME employees, the research found that 90% of employees said their employers haven't encouraged them to increase their workplace pension contributions to secure enhanced retirement provisions.
Many employees are only paying the minimum into their workplace pension and believe it will be enough to provide them with a comfortable standard of living in retirement. As a result, many may potentially fall short of their retirement goals. This would be bad news for both the employees and their employers, and highlights the urgent need for employers to take more proactive measures.
Other findings include:
- Pension scheme oversight: 24% of employers admitted to never reviewing their pension scheme's continued value for money, with an additional 28% only conducting such reviews sporadically. The financial impact of not reviewing a workplace pension scheme can be significant.
- Default pension fund alignment: Over half (56%) of SMEs had not assessed the appropriateness of their default pension fund for all employees. Default funds are designed to cater to a broad range of individuals, but not all employees have the same financial situation, risk tolerance, or retirement timeline.
By not reviewing the appropriateness of the default pension fund, employers run the risk of exposing their employees to reduced investment outcomes, potentially impacting their retirement savings.
- Unrealised savings awareness: While 63% of employers were conscious of the potential savings for businesses and employees through salary sacrifice, a surprising 68% of employees remained unaware of the possible national insurance savings.
This knowledge gap highlights a missed opportunity for many employees who may not realise that by engaging in a salary sacrifice scheme, they could contribute more efficiently into their workplace pension, ultimately securing a more stable financial future for themselves. Employers can play a role here in bridging this knowledge gap by informing employees about the advantages of salary sacrifice, both for their personal finances and the broader company's financial health.
- Most Valued benefits: 50% of employees placed workplace pensions in the number one spot when it comes to the benefits they value most, with SME employers almost in complete alignment, with 48% recognising they come first for their employees.
- Underestimated recruitment advantage: Despite being regarded as the most valued employee benefit by 50% of employees and 48% of SME leaders, a significant 42% of SMEs failed to incorporate workplace pension promotion into their recruitment process.
Promoting the workplace pension as part of the recruitment process is essential. It demonstrates a company's commitment to the long-term financial wellbeing of its employees, appealing to job seekers who prioritise financial security and future planning. And it helps SMEs attract top talent and compete with larger corporations in the talent market, as comprehensive benefits packages are becoming increasingly important to prospective employees.
Download the research report today and take the first step towards supporting your employees financial future.
SME Workplace Pensions and Benefits Research Report
We've just launched our SME Workplace Pensions and Benefits Research Report which delves into the landscape of workplace pensions and benefits within small and medium-sized enterprises (SMEs). The report uncovers the trends, challenges and opportunities that shape the way SMEs approach their pension and benefit strategies.
Maximising the benefits of research report
The research report is structured to provide valuable insights for SMEs. As you review the report, consider how the insights align with your current practices and future goals.
Share the report with key members of your team and develop an action plan based on the recommendations provided in the report. This might involve reviewing the benefits you currently offer, improving how you communicate with employees, or exploring new pension options.
If you have any questions or need further assistance in implementing the recommendations from the report, please do not hesitate to get in touch.