Workplace pensions valued but more to be done on confidence

A new National Association of Pension Funds (NAPF) Workplace Pensions Survey has revealed that a workplace pension is the most important company benefit an employer can offer.

However, while three quarters (75%) of employees believe it is important to have a pension that comes with their job, less than half (48%) have confidence in pensions when compared with other forms of retirement saving. With 45% of those surveyed not having confidence in pensions, there is a net Pensions Confidence Gap of only +3%.

The survey also revealed that those employers not offering a workplace pension are missing out on a loyalty bonus from their staff. Almost half (49%) of employees in these companies would feel greater loyalty to that company if they did offer a workplace pension.

NAPF Chief Executive, Joanne Segars, said: “Today’s workers still value pensions as a fundamental part of their employment package and believe they remain the best way to save for retirement. For employers there is a clear message that providing a workplace pension is rewarded by increased employee loyalty.

“The gap between the importance people attach to a workplace pension is at odds with their confidence, so it is clearly imperative that both the Government and the industry work harder to restore a positive image.

“Increased confidence will, in part, come with increased understanding and direct access to information. The workplace is an ideal place to provide this information.”

Pension is the most important workplace benefit for men

When rated against other company benefits, men value pensions more than women, with the latter believing that flexible working arrangements are more important. This shows that for some women, the ‘now factor’ of meeting family commitments is a higher priority than their own retirement income.

The Pensions Loyalty Bonus

The research showed that half (49%) of employees who work for a company that does not offer a workplace pension said they would feel more loyalty to their employer if there was such a pension on offer.

This loyalty bonus should be a consideration for companies that suffer from high staff turnover.

For those employees who work for a company that does offer a workplace pension, 39% said they are more loyal while 57% said it made no difference.

Workplace pensions valued

Three quarters of employees (75%) believe it is important to have a pension that comes with their job (men - 78% and women - 71%).

The overall value of a workplace pension can be seen because 55% of those employees without workplace access believe they are still important.

Pensions Confidence Gap – an area of concern for whole industry

There is a mismatch between those employees viewing workplace pensions as important (75%) while at the same time not feeling the same levels of confidence (48%) about them when compared with other forms of retirement saving.

The figures show that the pensions confidence gap is just 3% overall. However, the granularity shows that for both women and those employees without access to a workplace pension, the Confidence Gap is negative.

Pensions are seen as the best way to save for a pension

Compared with other forms, 40% of employees view pensions as the best method of saving for retirement. However, for those employees without a current workplace pension, property (33%) is seen as a better option than a workplace pension (25%).