The news that Brits are failing to prioritise saving for their old age should not come as a surprise, with 35% believing that saving for a potential emergency is of far more importance.
This has much to do with the economic climate, if course, with the cost of living continuing to rise at a disproportionate rate to earnings. This not only means that households can commit less to savings, but it also disincentivises the idea of putting cash aside for the future.
Fortunately, workplace pensions provide a vehicle through which individuals can save incrementally without compromising on their standard of living. But could employers do more to help their staff and plan more effectively for retirement? Let’s take a look.
Working with your Employer to Plan for Retirement
One of the main benefits of a modern workplace pension is that employers are now required to make mandatory contributions, to the tune of 2% of qualifying earnings. This, when added to your own 2% contribution and a 0.6% deposit from the government, creating a total investment of 5% on all qualifying earnings.
This will also increase to 8% from April 2019, as the UK government looks to bridge the state pension deficit by imploring private sector corporations to do more.
Employers are required to share this information when you start at a new job, while automatically enrolling you in the dedicated workplace scheme. Still, corporations and their staff can work more closely to track pension earnings and plan with great authority, so long as you’re willing to engage with employers and ask for as much detail as possible.
Remember, some employers may not be as informed as proactive as others when it comes to managing pension changes, so bring proactive in your approach and opening lines of communication can help you to develop a more detailed financial plan.
Is there any Practical Guidance Available?
The collaboration between employers and their staff can extend beyond mere conversation, however, with a number of pension service providers having developed tracking tools that help individuals monitor the growth of their funds.
Take Hymans, for example, whose tracking service provides a comprehensive list of transactions and total contribution values. This is also made available to employers, who can then share this data directly with staff members throughout the business.
The is a practical solution that bridges the knowledge gap that surrounds modern workplace pensions, as individuals can retain greater control over their finances and make realistic plans for the future.
This is not only imperative in an age where so many have lost sight of the importance of long-term financial planning, but it also enables businesses to help their employees without placing significant demands on the firm.