The majority (86%) of employees have less trust in their workplace pension scheme than 15 years ago, an increase on the 74% that said the same in 2008, according to research by Towers Watson.
The research on the future of workplace savings also found that two-thirds of organisations believe they are not getting value from their current benefit spend.
Three-quarters (75%) of employers intend to offer access to other savings products besides a pension scheme in the next five years, compared to only 6% that do so currently. Almost two-thirds intend to offer access to a wealth management platform in the next five years, compared to only 2% that do so currently.
The research also found that the level of employee engagement around defined contribution (DC) pension plans is often very low, although this is coupled with employers reporting that they intend to take a broader, more active role in assisting employees with their finances.
Philip Percival, senior consultant at Towers Watson, said: “These results should be a wake-up call for employers and are an indication that the traditional method of benefit provision may not best fit today’s workplace.
“Clearly, there is a need to rebuild trust in pensions, which has been damaged by the pace of change in the private sector during the past decade. In spite of these pension changes, employers still spend significant sums on benefits, and so it is disappointing to see it is not always felt to be delivering value.
“These findings show strong support for the concept of corporate savings, provided it is supported by financial education and financial planning. Employers have clearly made the link between greater savings choice and the need to educate employees.”
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