UK businesses adapting workplace pension schemes for millennials

Nine in ten businesses are considering their younger workforce when it comes to pension provision, research finds.

Two in five (23 per cent) employers believe millennials want digital pension tools, but only half this number have recently adopted them, according to a study by Aegon UK.

Two thirds (68 per cent) of employers now feel a greater duty of care towards their employees as a result of auto-enrolment.

According to the survey of 500 UK businesses, 87 per cent have recently made significant changes to their scheme, specifically to suit those aged between 16 and 35, often referred to as the millennial generation.

More than a quarter (26 per cent) have introduced a more rewarding overall pension scheme to attract and retain young talent, while 23 per cent have adopted digital tools to help young employees manage their contributions.

One in five (18 per cent) now provide rewards when individuals increase their personal pension contributions, while a further 15 per cent have broadened the pension options on offer to provide greater flexibility.

This move to digital is highlighted by the fact just 4 per cent have ramped up face-to-face or telephone advice in the workplace to suit these younger workers.

The introduction of auto-enrolment has been a key driver of change. More than two thirds (68 per cent) of those responsible for the workplace pension feel a greater duty of care for their employees now that they are obligated to organise a pension scheme on their behalf.

With more than one in five (23 per cent) businesses introducing digital pension tools to suit a new generation of workers, the workplace pension landscape is radically changing, but seemingly not fast enough.

Nearly twice as many employers, two in five (39 per cent), believe this millennial cohort would favour digital tools above all other media to monitor and communicate with them about their pension.

Despite the move to digital, print reminders (22 per cent) and regular meetings (22 per cent) are still popular for employers, with those responsible for their companies’ workplace pension scheme believing staff would prefer monthly letters or pay slips. One in ten (12 per cent) believe staff still appreciate communications through annual statements.

Angela Seymour-Jackson, managing director of Workplace Solutions at Aegon UK says, ‘We’re now in the digital age, where millennials account for a growing percentage of the workforce. Latest ONS statistics show those between the ages of 16 and 35 make up over a quarter of the UK population and are set to play a prominent role in the workforce.

‘These millennials are turning to workplace pensions more than ever. More workers aged 22 to 29 have signed up for a workplace pension since 2013 than any other age group. They account for a significant section of the workforce and it’s encouraging to see businesses adapting to meet their changing needs, alongside those of other generations.’

Further reading on pensions

Ben Lobel

Delphine Hintz

Ben Lobel was the editor of SmallBusiness.co.uk from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

Related Topics

Millennials
Pension Schemes