Marvin OnumonuResearch from People’s Pension found that 74% of employers are concerned employees are not saving enough for retirement.
Data showed that more than three quarters (77%) said younger workers and low earners are more exposed to financial pressure and may be more likely to stop saving as living costs go up.
A third (32%) of employers said younger employees are most likely to opt out of workplace pensions.
The main reason given was affordability (38%), followed by understanding (24%) and perceived value (18%).
Most small and medium-sized enterprises (SMEs) decision-makers (82%) said they feel responsible for their employees’ financial wellbeing, but 75% said rising business costs limit their ability to increase pay.
59% felt employees do not fully understand the value of their pension, while 52% were concerned staff are not engaged with or using their pension scheme properly.
Employers said clearer communication and education would improve engagement (45%), and 40% said extra support for financial wellbeing and retirement planning is important.
Stuart Reid, distribution director at People’s Partnership, said: “Employers are clearly focused on how they can support their workforce, particularly younger and lower-paid workers who are more exposed to financial pressure.
“As many households face renewed pressure on day-to-day finances, helping people stay engaged with long-term saving has become even more important.
“What this research highlights is the importance of communication and support in helping employees engage with their pension.”
Reid added: “Where understanding is lower, simple and accessible guidance can play an important role in helping people make informed decisions about their long-term finances.
“Even in a challenging environment, workplace pensions remain a key part of long-term financial planning.
“Supporting employees to stay engaged with saving, even at modest levels, can make a meaningful difference over time.”
