Marvin OnumonuNine in 10 workers said their workplace pension influenced whether they stayed or left their job, according to research from Penfold.
Its ‘Retirement reality check’ report most business owners still saw pensions as a compliance issue rather than a key part of their approach to wellbeing and retention.
Over half (53.6%) of small and medium-sized firms put in only the legal minimum, and less than one in seven (14%) offered to match contributions.
Almost half (47%) of workers said they set their own pension contributions at the legal minimum, which Penfold said left millions at risk of under-saving for retirement.
Chris Eastwood, CEO and co-founder at Penfold, said: “Employers are already paying for one of the most powerful tools they have to support morale and retention, but many underestimate its impact.
“At a time of rising living costs and economic uncertainty, employees are thinking much more carefully about their financial security.
“For many, their workplace pension is a signal of how seriously their employer takes their long-term wellbeing – not just today, but in the future.”
Eastwood added: “Yet for employers, this still sits firmly in the background, being viewed as a compliance requirement; important, but largely fixed.
“Our research shows that pensions influence how secure, committed and supported people feel at work, even if they’re not talked about day to day.
“That makes them one of the most important, and underused, tools employers already have.”
Additionally, the report found 57% of workers rated a pension as ‘very important’ when choosing a new job – higher than any other benefit.
95% said a company contribution of 3-4% was not enough to make them stay.
Over half said they would increase their pension contributions to about 12% of their salary if their employer matched it.
Eastwood added: “This isn’t just about retirement planning. Financial confidence plays a huge role in wellbeing and morale at work today.
“Yet more than half of employees don’t know the current value of their pension pot, and many don’t fully understand how their scheme works.
“Employers don’t need to become pension experts, but they do have an opportunity to make pensions clearer, more visible and more meaningful for their teams.”
He said: “Even without increasing contributions overnight, better communication and modern pension experiences can significantly increase the value employees feel they’re getting.
“When employees feel confident about their financial future, they’re more likely to stay, engage and commit.
“A better workplace pension strengthens retention without requiring a complete overhaul of existing benefits.”
