39% of Employees Lack Confidence Making Pension Decisions — What That Means for Employers

Think about the last time your organisation communicated something pension-related to staff. An email, maybe, or a notice about re-enrolment. A link to the pension provider’s website. Perhaps something tucked into the new starter pack.

Now consider this: according to new research from workplace pensions provider Cushon, 39% of UK employees do not feel confident they are making the right decisions about their pension. That figure comes from a survey of 2,000 employees, reported by both Employee Benefits and Pensions Age. The same research asked 500 HR managers whether their employees understand and value their workplace pension. Ninety-six per cent said yes.

That is a 57-point gap, and it is not easily explained away.

Employers Think the Job Is Done. Employees Disagree.

The Cushon findings are awkward for HR, because 85% of the employers surveyed said they actively promote pension guidance or support services to their staff. So it is not that pension communication is being neglected. Information is going out. The problem is that most employees are not converting that information into confidence.

This is a distinction worth sitting with. Sending a pension update email is not the same as helping someone understand what a default investment fund is or why increasing their contribution by 1% now might matter a great deal in twenty years. A lot of workplace pension communication is written for people who already have a working knowledge of how pensions function. Most employees do not have that baseline, and without it, the communication just washes over them.

The result is that your staff may well know their pension exists, know roughly what they contribute, and still have no idea whether any of that is the right amount, or whether their fund choice makes sense, or what they are actually going to do when they get close to retirement.

Low Engagement Is Not the Same as Low Interest

One number in the Cushon research deserves particular attention: 42% of employees said they would be more engaged with their pension if they understood it better.

It is easy for employers to read low engagement as evidence that employees do not care about their pension. That reading is usually wrong. Most people care about having enough money in retirement — they just find pensions genuinely difficult to navigate, and when something is confusing enough, the natural response is to defer rather than guess.

That is what is happening across a large section of the UK workforce. Employees are not avoiding their pension out of indifference. They are avoiding it because engaging with it feels like it requires knowledge they do not have. Fix the knowledge gap, and engagement tends to follow. The 42% figure is a reasonable indication of how much headroom there is.

Younger workers face a particular version of this problem. Research on pension engagement among younger employees consistently finds that early exposure to clear, accessible education has a lasting effect on how people relate to their pension throughout their working life. The habits and assumptions formed in the first few years of employment tend to stick.

What Employees Are Actually Being Asked to Understand

Part of why pension confidence is so low is that pensions are not a single topic. Over the course of a working life, an employee will be asked to make or consider decisions across a range of interconnected areas — and each one requires some basic understanding to navigate sensibly.

Auto-enrolment gets people into a scheme, but it does not tell them what the minimum contribution means in practice, or what opting out actually costs them over time. Salary sacrifice sounds technical to most employees, and many never find out it could improve their take-home pay and increase their pension pot simultaneously. Investment fund choices often go untouched because employees do not know enough to feel they can make a considered decision, so they leave whatever default they were placed in when they joined.

Beyond that, there is the State Pension — widely misunderstood in terms of what it pays and when — pension statements that most employees do not know how to read, old pension pots from previous jobs sitting forgotten, and eventually a retirement decision that involves choosing between products most people have never heard of until the moment they need to choose.

None of this is obscure financial planning. It is the ordinary experience of being an employee in the UK. But employers tend to communicate about each of these things individually, at moments when employees are busy with other things, and in language that assumes more prior knowledge than most people have.

The Communication Trap

There is a trap that well-meaning HR teams fall into regularly, and the Cushon data is a fair description of it.

You send the communication. The box gets ticked. Employees technically have the information. But six months later, someone asks a question that suggests they never really took it in, and you end up having the same conversation — often one-to-one, often at a moment when the employee is worried about a specific decision — that the original communication was supposed to prevent.

HR managers with responsibility for pension communication will recognise the pattern. It is not a failure of effort. It is a structural issue with how pension information gets delivered. Most pension communication is designed around compliance — making sure the right notices go out at the right time — rather than around comprehension. Those are different design goals, and they produce different results.

Education that actually builds understanding works differently. It starts from where employees are, not from where the regulation requires you to leave them. It covers the topics that create real-world decisions for employees — contributions, tax relief, fund choices, salary sacrifice, retirement options — in plain language, and it checks that understanding has landed rather than just that content has been delivered. There is a meaningful difference between an employee who has received a pension guide and an employee who can explain what pension tax relief means for their actual pay packet.

A guide to building financial wellbeing education for SMEs is a useful starting point if you are trying to work out what a practical programme looks like without a large budget.

A Practical Concern for Smaller Businesses

The Cushon survey covered organisations with more than 250 employees. That matters, because it means the 39% confidence figure comes from workforces that typically have HR teams, benefit platforms, and ongoing relationships with pension advisers. Smaller employers — running auto-enrolment obligations alongside everything else, often without any of that infrastructure — are unlikely to be doing better.

A business with thirty or forty employees is usually relying on one person to handle payroll, HR queries, and pension administration. That person is not going to have time to produce bespoke pension education, and they almost certainly cannot answer detailed employee questions about investment choices or retirement income without straying into regulated advice territory. The Cushon confidence gap almost certainly looks different — and worse — in that environment.

That is also where the consequences are most visible. When one employee in a small team is confused about their pension and ends up in a conversation with you about it, that is half a morning’s productivity gone for both of you. Multiply it across a workforce, and it adds up.

What Good Pension Education Actually Covers

The topics that tend to make the biggest practical difference to employee confidence are not the ones that get the most airtime in standard pension communications. They are:

• How contributions work and what the real cost of saving is, once tax relief is factored in
• What salary sacrifice means for take-home pay — and why some employees are missing out by not using it
• What a default investment fund is and whether it is likely to be appropriate as circumstances change
• How to read a pension statement and what the projected figures actually assume
• The State Pension — what it pays, when it is available, and how to check an individual forecast
• How to recognise a pension scam, which disproportionately affect people who are actively engaged with their pension
• What the options at retirement look like and when those decisions need to be made

These are the topics covered in Aspina’s pension training modules, which are designed to be completed in around an hour across eight short sessions. The training is trackable, which matters for a separate reason covered below.

There Is Also a Compliance Dimension

The Pensions Regulator expects employers to ensure employees have adequate information about their workplace pension. How far that obligation extends in practice — and what “adequate” means — has become a more active area of focus as auto-enrolment has matured.

One thing that has not changed is the difference between sending information and demonstrating that employees have engaged with it. If you send a pension update email, you know it went out. You do not know whether anyone read it. Trackable training creates a completion record — an audit trail that shows who has engaged with pension education, what they covered, and when. That is a different kind of evidence, and it is considerably more useful if questions are ever raised about whether your workforce has been adequately supported.

The Declaration of Compliance is the formal record that auto-enrolment duties have been met. Documentation of employee pension education sits alongside that as evidence of ongoing good governance — and the consequences of non-compliance are significant enough that most employers would rather have the paper trail than not.

The Broader Picture

The Cushon research does not exist in isolation. Financial wellbeing has become a genuine workplace priority over the past few years, with employers increasingly recognising that financial stress affects concentration, attendance, and retention in ways that are costly enough to be worth addressing directly. Pensions sit at the centre of that, partly because they are the most valuable financial benefit most employees receive and partly because they are the one area where employee decisions have the largest long-term consequences.

A workforce where 39% of people feel unconfident about their pension is a workforce where a significant proportion of people are likely carrying some version of that anxiety — not necessarily acutely, but as background noise. It is worth asking whether the communication your organisation is currently doing is actually moving that number.

If you want to understand what practical pension education looks like, our employer guides cover the main areas in detail, and the FAQs address common questions about how training is delivered and tracked. To discuss what would work for your organisation specifically, get in touch.