To retire at age 60 with a £20,000 pension, an employee in their mid 40s needs to be paying over £1,500 a month into their defined contribution (DC) pension. Most are paying a fraction of this - when it comes to pension savings, we are ostriches with our heads firmly rooted in the sand. That is, of course, until it is too late to do anything about it.
One of the key culprits for this lack of engagement with pensions is negative press coverage about high charges on pension products.
Added to this, one of four UK workers admit that money worries impact their job performance plus we know financial worry is the largest single cause of stress in the UK, which in turn is the largest cause of absenteeism.
Employees desperately need more support and guidance on financial matters, and retirement savings in particular. In the US, employers have been filling this gap for years and now progressive UK employers are following suit. In our experience, the key to successfully engaging your workforce on financial matters is to make it personal - one size fits all will just not cut it!
PwC’s Savings Lab technology helps employers understand their people and pension data to better manage costs and promote financial wellbeing in a targeted way. Savings Lab is a fully integrated digital platform that helps you answer three important questions:
Can my people afford to retire? Get a granular view of the savings journey for different cohorts of your workforce and identify initiatives to improve member outcomes.
How financially healthy are my people? Build a detailed picture of the financial profile of your workforce and create a targeted financial wellbeing programme to better support them.
Is my pension scheme giving me value for money? Measure the effectiveness of your pension provider and find out whether you scheme is providing value to you and your members.
Savings Lab has been designed to help employers understand where their employees are on their financial journey and maximise the value from their pension spend. This results in happier and more motivated employees and significant productivity benefits for the business.
Author: Alan MacCleaster, PwC Pension Adviser
Pension adviser, PwC United Kingdom
Tel: +44 (0) 118 938 3598
Director - HRS Employment Solutions, PwC United Kingdom
Tel: +44 (0)1895 522 035