There’s a comprehension gap in workplace pension communication, with more than a third (37%) of UK employees claiming their workplace pension scheme was either not clearly explained to them or they had no memory of any explanation.
Research from workplace pension provider Penfold revealed that workers’ views were the opposite of employers.
More than one in five (22%) employees report not understanding how their pension works, and one in 10 said they have no memory of ever receiving a pension explanation from their employer.
But almost nine in ten (89%) UK employers said they felt confident explaining their pension scheme to employees, with 85% believing their employees fully understand how their scheme works.
Chris Eastwood, CEO and co-founder at Penfold, said: “Our research shows a clear gap between what employers think they’re communicating and what employees are actually taking away. Many workers still aren’t sure how their pension works, what they’re paying in, or what it could mean for their future.”
Other key findings from the report include:
• 26% of employees feel anxious or confused when they think about their pension.
• 40% of employees check their pension once a month, but nearly 1 in 10 (9%) have never checked or reviewed their pension at all
• Only 29% trust their pension provider most to explain their pension to them.
• 65% of employers already see their pension as a competitive advantage.
Mr Eastwood said: “Employers play an important role, but providers also have a responsibility to make pensions easier to understand through the experience itself. That means helping people clearly see what they’re saving, what their employer is contributing and what that could mean at retirement.
“When people can see that clearly, they’re far more likely to engage with their pension and take positive action."
• The findings come from Penfold’s ‘The UK Pension Gap’ report, based on surveys of 2,000 UK employees and 500 small and medium-sized businesses.