Are Your Employees Actually Engaged With Their Pension?

You set up the workplace pension. You’re ticking the compliance boxes. But are your employees actually paying attention to it?

According to new research from People’s Pension, the answer — for most SMEs — is probably not.

59% of small and medium-sized businesses worry their employees do not fully understand the value of their pension as part of their overall compensation. And 62% fear that ongoing financial pressure will push more employees to opt out altogether.

That’s a problem — not just for your team’s financial future, but for your business.

Why Pension Engagement Matters More Than You Think

Most employers think their job ends at setting up the pension and meeting auto-enrolment requirements. But the research tells a different story.

82% of SME employers believe it’s their responsibility to help employees plan for retirement — not just enrol them and move on.

The problem is that good intentions do not automatically translate into action. Half of the employers surveyed felt their pension provider was not communicating effectively enough with employees. A quarter said they wanted regular education sessions, webinars, or workshops — support that most providers simply do not offer.

When employees do not understand their pension, they undervalue it. When they undervalue it, they are more likely to opt out. And when opt-out rates rise, your auto-enrolment compliance becomes harder to maintain — and the benefit you are paying for loses its impact.

The Hidden Cost of Low Engagement

Think about what your pension contribution actually costs your business each month. Now imagine a significant portion of your team not understanding that this is money being invested directly in their future — effectively free money they are receiving from you.

That’s a retention and recruitment tool going to waste.

Salary exchange (also known as salary sacrifice) adds another layer. When structured correctly, salary exchange reduces both employee and employer National Insurance contributions — meaning your business saves money on every pension contribution, and your employees take home more. But if employees do not understand how it works, they cannot appreciate the benefit — or make an informed decision about participating.

At Husky Finance, we see this gap every week. Employers doing the right thing, but employees not understanding what they are actually receiving.

What Better Pension Engagement Looks Like

The research found that 45% of employers said improved communication from their pension provider would make them less likely to switch providers. That tells you everything — engagement is not just good for employees, it builds loyalty and reduces admin headaches for employers too.

Better engagement does not have to mean complicated. It starts with:

• Clear, plain-English explanations of what the pension is, how much is going in, and what it means for the future
• Regular updates — not just at enrolment, but throughout the year
• Salary exchange conversations — helping employees understand the NI savings they are benefiting from
• Simple access to pension information without having to chase a provider

How Husky Finance Helps

We set up and manage workplace pensions, compliance, and salary exchange — all in one place. But we also help you communicate the value of what you are offering to your team.

Whether you are setting up a pension for the first time, reviewing your current provider, or want to introduce salary exchange to reduce your NI costs, we make the process straightforward — for you and your employees.

Because a pension your team understands is worth far more than one they ignore.

Source: People’s Pension employer research, 2025. Figures relate to SME employers in the UK.