The Business Benefits of a Better Pension

Why UK Employers Need to Rethink Workplace Pensions

The UK pension landscape has undergone significant changes in recent years. The shift from Defined Benefit (DB) to Defined Contribution (DC) schemes has placed greater responsibility on employees to secure their retirement outcomes. While auto-enrolment has increased participation, with 88% of eligible employees contributing to workplace pensions in 2022 (gov.uk), concerns persist about the adequacy of these savings. Many employees are contributing at or just above the minimum required levels, which may not be sufficient to ensure financial security in retirement.

This issue is not just about individual financial insecurity; it presents a challenge for businesses. Employers have a pivotal role in ensuring their workforce’s financial well-being. By offering enhanced workplace pensions, businesses can address this crisis while unlocking measurable organisational benefits.

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Key Takeaways:

• Offering a superior workplace pension can attract and retain top talent, giving businesses a competitive edge.
• Financial stress significantly impacts productivity; better pensions reduce employee stress and improve focus and engagement.
• High-quality pensions reduce recruitment and turnover costs, saving UK businesses an average of £30,000 per employee replaced.
• Better pensions lead to improved employee health outcomes, reducing absenteeism and boosting overall productivity.
• eurikah ensures suitable retirement outcomes with the current mandatory contribution rate, addressing common inadequacies in standard schemes.

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The Business Case for a Better Pension

1. Attracting and Retaining Talent: A better pension offering can set your business apart in a competitive job market. Over 25% of UK employees have said they would switch jobs for a company that provides better pension contributions and financial advice (Drewberry Insurance). Additionally, 60% of employees would prefer higher pension contributions over other company benefits, indicating the strong value employees place on retirement security (Drewberry Insurance).
2. For small to medium-sized businesses (SMEs), offering a pension that meets these expectations can create a competitive advantage, making it easier to attract top talent and retain experienced employees who might otherwise look elsewhere.
3. Boosting Employee Productivity: Financial stress is a major barrier to productivity. Nearly 40% of UK workers report experiencing sleepless nights due to financial concerns (HR News). This stress often leads to reduced focus and engagement at work, costing businesses in terms of output and morale.
4. By providing a high-quality pension, employers can alleviate some of these financial pressures, creating a more secure and focused workforce. Employees who feel their financial futures are taken care of are more likely to approach their work with confidence and dedication.
5. Reducing Recruitment and Turnover Costs: Employee turnover is expensive and disruptive. It is estimated that replacing a single employee in the UK costs businesses around £3,000, not including lost productivity during the onboarding process (Glassdoor). High-quality pensions foster loyalty, reducing the likelihood of employees leaving for better benefits elsewhere.
6. For employers, this means not only financial savings but also a more cohesive team with deeper business knowledge: factors that are vital for long-term growth.
7. Improved Employee Health Outcomes: The link between financial security and health is well-established. Employees with confidence in their retirement savings are 25% more likely to report excellent health compared to those without adequate savings (Aegon UK). Reduced financial stress leads to better mental health and fewer sick days, which directly impacts a company’s bottom line.
8. Offering a better pension is an investment in your employees’ well-being, ensuring they remain healthy, productive, and committed to their roles.
9. Long-Term Cost Savings Through Financial Wellness Initiatives: Financially stressed employees cost UK businesses an estimated £1.56 billion annually due to absenteeism and reduced productivity (CIPD). By integrating a strong pension scheme into a broader financial wellness strategy, employers can reduce these indirect costs.
10. A better pension scheme not only addresses retirement adequacy but also alleviates short-term financial stressors, making it easier for employees to manage their day-to-day finances.
11. Flexibility and Scalability for SMEs: As businesses grow, so do their needs. The eurikah pension scheme is designed to scale with your business, ensuring that SMEs can remain competitive without incurring prohibitive costs. This flexibility allows smaller businesses to offer a pension comparable to those of larger employers, creating a level playing field in attracting talent.
12. Tailored Communication Tools for Employee Engagement: Even the best pension schemes need effective communication to ensure employees understand and value them. Research shows that 85% of employees are more likely to appreciate a benefit when it is clearly communicated (MetLife UK). eurikah offers tools and resources to help employers engage their workforce, ensuring high participation rates and employee satisfaction.

Why eurikah Is the Right Choice

Not all pension schemes are created equal. Many auto-enrolment schemes fall short in delivering the retirement outcomes employees need. The eurikah pension scheme stands apart by ensuring that even the 8% minimum contribution rate can provide suitable retirement outcomes.

Here’s why employers should consider eurikah:

• Superior Retirement Outcomes: Employees receive a retirement income aligned with their goals, addressing inadequacies common in standard schemes.
• Hassle-Free Administration: eurikah reduces the administrative burden on employers, allowing them to focus on their business.
• Employee Satisfaction: A pension scheme designed to meet employees’ needs builds trust and loyalty.

Take Action Today

The UK pension crisis requires proactive employer intervention. Start by assessing:

• Is your current pension scheme adequate for delivering suitable retirement outcomes?
• Could an improved pension help you attract, retain, and engage your workforce more effectively?

Explore the eurikah pension scheme today to see how it can transform your business while supporting your employees’ financial futures.

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