"Our data shows that by investing in pension engagement, employers are not only supporting their employees’ future, but also unlocking stronger financial performance today"
- Graeme Bold - Scottish Widows
UK businesses that actively engage employees in their pensions are also experiencing stronger financial performance, highlighting a clear connection between workforce wellbeing and commercial success, according to a new report from Scottish Widows.
The study, published this week, shows that companies encouraging staff to contribute above default levels and offering generous benefits packages outperform their peers financially. Scottish Widows collaborated with research agency Opinium, surveying 1,000 senior decision makers responsible for pensions and 2,000 employees for the report, titled Retirement Realities: Unlocking The Workplace Benefits.
The research found that two-thirds (64%) of UK businesses that actively educate employees on pensions reported ‘very good’ financial performance. By contrast, where firms take a less active role in promoting pensions, only 18% described their financial performance as ‘very good’, with the majority rating it as merely ‘okay’.
Companies that contribute more generously to employee pensions also see positive results. Among firms contributing over 8% of an employee’s salary by default, 41% report very strong financial performance, compared with 19% of firms with just ‘okay’ results. Only 11% of well-performing firms provide the minimum 3% default contribution required under automatic enrolment.
The relationship between employee benefits and performance extends beyond pensions. Firms offering more generous non-pension benefits also report stronger financial results. Just over half (51%) of companies providing healthcare above statutory requirements, 48% offering extended maternity leave, and 39% granting above-minimum paternity leave achieve the best financial performance.
Graeme Bold, managing director, workplace and intermediary wealth at Scottish Widows, said: "Workplace pensions are a powerful, yet often overlooked way to shape employees’ long-term financial wellbeing."
"Our data shows that by investing in pension engagement, employers are not only supporting their employees’ future, but also unlocking stronger financial performance today. This helps to set the foundations for an engaged and productive workforce, which attracts and retains top talent.”
