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Is your workplace pension failing your business? 5 things to consider
It’s easy to think that since you already have a workplace pension there’s no reason to look at different providers.
However, your business and employees could suffer if you don’t consider your options and with the advent of digital pension platforms, the switch has never been more straightforward.
Here are five things you should think about regarding your current workplace pension.
1. Does Your Current Provider Help Save You Money?
If your current pension provider hasn't introduced you to the advantages of salary sacrifice, you’re missing out. This method of making pension contributions can save both your employees and your business money by decreasing National Insurance (NI) contributions.
If you ask your employees to reduce their gross salary (for example, by the 5% or more they contribute to their pension) and offer to pay the difference into their pension, their take home pay increases.
This is because the less an individual earns, the less NI they pay. Plus, they can continue to invest the same amount in their future, despite their gross salary seeing a reduction. As the wage bill of your company reduces, business National Insurance contributions decrease too.
Penfold has streamlined this process for businesses over the years and have a straightforward process to help with implementation.
2. You Might Be Reducing Your Retirement Savings Pot
Staying with a pension provider that has poor-performing funds may be silently costing you and your team. While it’s common knowledge that past performance don't guarantee future returns, you should know that the performance history among workplace pension providers varies drastically.
Even slight performance disparities can have a profound impact over the duration of a career. For example, a consistent 1% dip below the average growth rate could mean an employee might miss out £100k+, based on a median career salary of around £32k.
Therefore, routinely evaluating your company's pension strategy is crucial.
3. Financial Stress Affects Productivity
Employees struggling with financial concerns tend to underperform. According to a CIPD study, financially stressed individuals often take more sick leaves, feel less engaged, and are generally dissatisfied.
In a Penfold survey, a staggering 87% of participants stated financial stress affected their mental well-being. Most (70%) were anxious about affording pension contributions.
Offering a user-friendly pension system can alleviate some of this stress. The Penfold pension, available on mobile or desktop, gives employees easy access how much they’ve saved, how much they’ll need and how to save it.
A clear picture of post-work income helps with pension anxiety, giving employees one less thing to worry about.
4. Attract and Retain Premier Talent
With the UK's unemployment rate around historic lows of about 4% in 2023's first quarter, most of your potential hires are probably already employed. Consider these survey results:
- 16% of employees would switch jobs for better benefits.
- A whopping 90% would remain in their current position because of an appealing pension plan.
If your team isn't engaging with your pension scheme because it's too complex or uninteresting, it's worth revisiting its potential. Penfold’s pension app makes it engaging and straightforward. While it might not be as enticing as the latest TikTok trend, it's a step in that direction.
5. Transitioning is a Breeze
No matter your company size you can switch your company's pension provider anytime, there’s usually no contract for a defined period. Unsure how to change workplace pension provider? Simply:
- Notify the new provider you would like to switch
- Inform your current provider about the change
- Update your team about the changes.
Concerned about an influx of pension-related queries from employees? A comprehensive introduction session from the new provider can mitigate concerns. Penfold specialise in these sessions, offering a pension walkthrough and welcome kits for everyone.
See how Penfold can bring financial wellbeing to your team and get industry-beating account management at no extra charge.
