If employers want to solve their recruitment crisis, then they should be looking hard at the pension they are offering – and the advice they are providing for their staff’s retirement finances. That’s the biggest takeaway from a new survey of HR professionals by AAA members Punter Southall Aspire.
For the last two years, flexible working topped the wish list for employee benefits. In this year’s Punter Southall Aspire survey, carried out with People Management Insights, 900 of 1,188 HR professionals put pensions back at the top of the pile. Flexible working is still seen as an important feature but ranked lower with 893. Third was mental health and wellbeing on 882.
Punter Southall Aspire Chief Executive Steve Butler says that pensions had traditionally been seen as the “jewel in the crown” of employee benefits but the unprecedented impact of Covid and its effect on working patterns had dislodged it, albeit temporarily.
“’Normal’ has become a concept few of us can agree on, but seeing HR teams selecting pensions as the most important employee benefit means we are moving on from dealing with a receding global health crisis to planning for the future again with a measure of confidence,” he says.
“This demonstrates the direction of travel: pensions are a constant in a changing world but that doesn’t mean you can ignore them without a cost.”
The survey also discovered that 51 per cent of companies surveyed did nothing to support their staff on how to plan for life after work, while just under a third did provide access to some sort of guidance and 12 per cent actually paid for it. In summary, what he describes as an “Advice Gap” remains a canyon.
“In principle, pensions are easy,” he says. “Your employee pays in, your employer pays in, the taxman pays in to build up a pot. But there are very complex decisions to make when you are approaching retirement and this is where staff look to you, their employer. Do you think turning your back is the right thing to do?”
Steve adds that this gap was the reason behind his company setting up their free “Pension Potential” service (https://www.puntersouthall.com/aspire/pension-potential). This is an online tool to help people assess how large a retirement income their pension can buy for retirement by comparing every annuity on the market. It also offers a picture of what drawdown can look like or a mix of options. “By looking at every annuity,” he concludes, “they could retire more on thousands more than they thought they could.”