How Employers Can Keep Pensions Relevant Through Financial Wellbeing Education

For HR teams and SME owners trying to get more value from their pension offering

The problem nobody talks about

Here’s something most of us in HR already suspect but rarely say out loud: employees don’t value their pension. Not really. They tick the auto-enrolment box, glance at the payslip deduction, and that’s about it.

A recent piece in Employee Benefits put numbers to this. The magazine asked pension experts a straightforward question: how can employers make sure their workplace pension actually works as a recruitment and retention tool?

The answers were revealing and slightly uncomfortable.

Drewberry’s research found that just 15% of employees feel they genuinely understand how pensions work. More than half (57%) don’t know how much they should be saving for retirement. These are people we’re spending real money on, and they’ve no idea what they’re getting.

That’s the gap. We’re offering a benefit worth thousands of pounds a year, and it barely registers.

What the pension experts actually said

The Employee Benefits article pulled together views from several industry specialists. A few points stood out.

Contributions need to be higher (yes, we know)

Mark Futcher from Barnett Waddingham made the point that 3% employer contributions, the legal minimum, won’t give most people a decent retirement. His suggestion? Aim for combined contributions of 12% or more if you want the pension to mean something.

That’s a big jump for many employers. But Joshua Hayes at Howden offered a middle ground: matching schemes, or gradual increases tied to pay rises. Not revolutionary, but practical.

Regulatory changes are coming

This bit matters. The Pensions Dashboard is on its way. Small-pot consolidation rules are changing. And there’s a salary sacrifice cap arriving in 2029 that’ll reduce the NI savings employers currently enjoy.

Justin McGilloway at Wedlake Bell put it bluntly: employers will need to rethink how they incentivise pension saving once those NI advantages shrink.

For anyone managing workplace pension duties in a small business, this is worth watching. The compliance burden isn’t getting lighter.

Different generations, different attitudes

One observation from the article that rang true: younger employees often see pensions as background noise. They’re more focused on salary, flexibility, paying off debt, saving for a deposit. Retirement feels abstract.

Older employees, mid-career onwards, tend to care more. Retirement stops being theoretical and starts being a real thing they need to plan for.

So if you’re communicating pensions the same way to a 25-year-old graduate and a 50-year-old manager, you’re probably reaching neither of them properly.

Where education fits in

None of this is news to most HR teams. We know pensions are undervalued. We know communication matters. The issue is finding time to do anything about it.

Pension scheme documents are dense. The rules around pension tax relief in the UK aren’t intuitive. Translating all of that into something an employee will actually read, let alone understand, takes effort most of us don’t have spare.

This is where structured learning comes in. Not a glossy benefits brochure. Not a 40-page scheme booklet. Proper online pension training that breaks things down into digestible chunks.

Done well, it covers the basics people genuinely need:

How auto-enrolment works and what happens if you opt out
What employer contributions actually mean in pound terms
Tax relief and why it’s worth more than most people realise
How investment growth compounds over time
Why contribution levels matter more than people think
How pensions connect to the rest of someone’s financial life

The last point matters. Pensions don’t exist in isolation. For a lot of employees, understanding their pension only clicks when they see it alongside ISAs, mortgages, state pension forecasts, etc.

Why this works for SMEs

Larger employers can throw resources at this. Dedicated benefits teams, pension surgeons on site, fancy comms campaigns.

Most SMEs can’t. You might have one HR person covering everything, or it falls to a finance manager who’s already stretched. Bringing in pension specialists isn’t realistic.

E-learning solves part of that problem. Employees get consistent, compliant information without someone having to deliver it manually. It scales. It doesn’t require diary coordination. And it means the new starter in March gets the same quality explanation as the one who joined in September.

The evidence base for what ROI looks like on financial wellbeing programmes is still building. We’re not yet at the point where there are abundant pension case studies from SMEs proving exact returns. But the logic is hard to argue with: people who understand a benefit tend to value it more. And people who feel valued tend to stay.

The bottom line

Pensions remain one of the most expensive benefits most employers offer. If employees don’t understand them, that money isn’t working as hard as it could.

Education won’t fix everything. It won’t make a mediocre contribution rate suddenly attractive, or solve the fact that younger workers have other financial priorities. But it does something important: it closes the gap between what we’re offering and what employees think they’re getting.

Financial wellbeing education isn’t regulated advice; it doesn’t tell people what to do with their money. What it does is give them enough knowledge to ask better questions, make more informed choices, and actually engage with the benefit we’re paying for.

For HR teams trying to get more from their pension spend without fundamentally increasing costs, that’s a reasonable place to start.

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