A whole new generation needs to know about pensions
The latest ONS statistics shows this age-group make up over a quarter of the UK population and are set to play a prominent role in the labour force (2). This generation has entered the workforce in a big way, turning to workplace pensions more than ever, with more workers aged 22 to 29 signing up for a workplace pension since 2013 than any other age group3. This has serious ramifications for employers, and ignoring the mood of the next generation means closing yourself off to two thirds of the young talent pool.
Now in our third year of auto-enrolment, research (1) by Aegon reveals that companies in the UK are responding to this shift, fundamentally changing their workplace pension schemes to suit the increasing number of millennials in the workforce. Almost 90 per cent (87%) have recently made changes to their scheme to suit millennials.
The introduction of auto-enrolment appears to have been the key driver of change, with more than two thirds (68%) of those responsible for the workplace pension feeling a greater duty of care for their employees now that they are obligated to organise a pension scheme on their behalf. For the younger generation however, digital tools are essential to interact with their pension in a way that suits their lifestyle. These younger employees are less likely to expect a job for life, and turnover rates are predicted to rise from 14.6 to 18 per cent by 20184. Traditional methods of engagement are slowly losing their appeal among this digitally-savvy generation, and as a result employers need to think how they can reward and retain talent, and pensions are a part of this. Millennials have grown up with broadband, smartphones, laptops and social media being the norm, and consequently, expect instant access to information. Technology usage is the status quo for communication of this generation, and it’s not surprising that PWC found at least two-fifths (41%) 5 prefer to communicate electronically at work than face to face or even over the telephone.