Employers focus on practical steps to support pension saving among younger workers 

Employers are stepping up efforts to support pension saving among younger and lower-paid staff as financial pressure continues to affect long-term financial wellbeing in UK workplaces. 

New research from People’s Pension shows nearly three quarters of employers questioned (74 per cent) are concerned that employees are not saving enough for retirement. Concern is higher for younger workers and low earners, with 77 per cent of employers highlighting risks for both groups as rising living costs reduce disposable income. 

The findings point to a growing link between financial wellbeing and overall workplace health. Employers are increasingly recognising that financial stress can affect mental health, productivity and long-term wellbeing, making pension engagement part of a wider workplace health strategy. 

One third of employers (32 per cent) believe younger workers are most likely to opt out of workplace pensions. Affordability is the main reason cited (38 per cent), followed by lack of understanding (24 per cent) and perceived value (18 per cent). This suggests communication and education remain key barriers to engagement. 

More than four in five SME decision-makers (82 per cent) say they feel responsible for supporting employees’ financial wellbeing, despite three quarters (75 per cent) facing limits on pay increases due to rising business costs. This reflects a shift in how employers view their role in supporting workforce health beyond traditional benefits. 

Gaps in understanding remain a concern. Nearly six in ten employers (59 per cent) say employees do not fully understand the value of their pension, while 52 per cent believe workers are not engaging with or making the most of available schemes. 

Nearly half of employers (45 per cent) say clearer communication and education would improve pension engagement, while 40 per cent point to the need for broader financial wellbeing and retirement planning support. These measures are increasingly seen as part of a preventative approach to workplace health, helping reduce financial stress before it impacts wellbeing and performance. 

Stuart Reid, Distribution Director at People’s Partnership, said: 

“Employers are clearly focused on how they can support their workforce, particularly younger and lower-paid workers who are more exposed to financial pressure. As many households face renewed pressure on day-to-day finances, helping people stay engaged with long-term saving has become even more important. 

“What this research highlights is the importance of communication and support in helping employees engage with their pension. Where understanding is lower, simple and accessible guidance can play an important role in helping people make informed decisions about their long-term finances. 

“Even in a challenging environment, workplace pensions remain a key part of long-term financial planning. Supporting employees to stay engaged with saving, even at modest levels, can make a meaningful difference over time.” 

The findings underline how financial wellbeing is becoming a core pillar of workplace health strategies across the UK, with employers looking for practical ways to support long-term security while addressing immediate financial pressures.