Employer engagement and support are as important as contributions for boosting employee savings in DC pension schemes, Lynn Graves has claimed.
The corporate pensions specialist at Scottish Widows said: “As workers begin to understand the positive impact of auto-enrolment, businesses need to ask themselves whether they are providing enough ongoing support to encourage staff to be more engaged with longer-term savings.”
The provider’s latest workplace pensions report showed that providing a pension alone is insufficient and that employees were looking to employers to provide additional support and education.
Employees wanted to know not only the mechanics of AE, but also how to make the most of saving adequately for retirement, Ms Graves added.
The research found that since the introduction of AE in large and medium-sized businesses, 52 per cent of medium-sized business employees were now saving adequately, a rise of 6 per cent year-on-year, while 39 per cent now felt optimistic about the long-term outlook, compared to 36 per cent in 2014.
The number of employees saving adequately in large businesses increased from 53 per cent in 2013 to 66 per cent, as increasing numbers looked at their workplace pension as a key provider of retirement income.
Laurence Sanderson, financial consultant at Essex-based Sterling & Law, said: “When employers care, it makes such a difference. Ongoing support, raising awareness and engagement are crucial. It is the simple stuff such as showing the benefits of accumulating pensions, the pension freedoms and tax efficiency.”