What employers should know about pension wellbeing
What is Pension Wellbeing
Pension wellbeing comes under the wider category of financial wellbeing but the focus is placed on pensions and helping people to improve their relationship with theirs. Pension wellbeing involves educating and empowering employees to manage their pensions successfully and prepare for their retirement early.
Good pension wellbeing means having the resources and skills to understand and manage your pension well so that you can achieve your desired retirement lifestyle. Employees should be able to keep track of their pension pots and have a clear plan of how to reach a comfortable retirement.
Why is pension wellbeing important?
Pension wellbeing is important for both employers and employees. Employers should prioritise their employee’s wellbeing in all areas, not forgetting to help them understand and manage their pensions. This is one of many peoples largest assets so should be cared for well. Employers who play an active role in supporting their employees on their pension wellbeing journey are likely to see a decrease in poor employee mental health due to financial stress. This will increase productivity within the workplace.
Employees should focus on their pension wellbeing to ensure that they are saving enough towards their retirement. If they do not prioritise their pension, they face having to rely on the state pension to survive in their later years. This could result in the development of anxiety. Furthermore, employees should seek education to help them improve their pension wellbeing so that they can use this knowledge to make better decisions about their pension in the future. These decisions may include whether to increase their pension contributions.
What are the duties of an employer when it comes to pension wellbeing?
Employers should place the general wellbeing of their employees at the forefront of their minds as staff are the driving force behind any business. Therefore, focusing on the pension wellbeing of employees is the duty of an employer.
In order to improve pension wellbeing, employers should educate employees on their workplace pension and why saving towards their retirement is vital for their mental wellbeing. Education could be provided in the form of talks and discussions held by pensions experts from within the business or from external sources. Allowing employees to ask any questions about their pensions to an expert will help them to better understand and manage their own situations.
Employers should ensure that their staff know that they are welcome to discuss anything about their finances and pensions with them. An open and honest relationship between employer and employee will encourage pension understanding to grow within the wider organisation.
Furthermore, employers have a duty to inform employees of any pension updates within the news and do what they can to support them and give advice where required. They should listen readily to any concerns and point employees in the right direction to get help and advice as needed.
When managing your workplace pension scheme, you should keep employees informed about any developments and discuss any changes to their contributions with them. This will help to maintain a good level of pension wellbeing within the workplace as employees will be constantly aware of their pension situation and regularly looking for ways to improve this.
Effects of neglecting pension wellbeing:
Employees who do not have a good level of pension wellbeing may come to work stressed and confused about their future. This will negatively impact their productivity and happiness within the workplace. This in turn will have a negative effect on the success of the business overall.
Employers who do not make it a priority to maintain employees’ pension wellbeing are likely to see a decline in employees’ overall wellbeing. This is especially true for those who may be approaching retirement age and have realised that they do not understand their pension situation and/or do not have enough money to retire comfortably.
Overall, neglecting pension wellbeing is not beneficial to any party within the workplace and can cause problems that affect the success of the entire business.