For many workers, especially the millennial generation, just the mention of pension plans is enough for them to panic. While it may not be the most exciting or glamorous topic, it is incredibly important as it will determine how enjoyable your retirement is - key years where you will want to lead a comfortable lifestyle.
Studies show that millennials are contributing less towards retirement with many of this generation working in the digital marketing industry. It appears that the main reason for this is that many millennials, and younger generations, have limited knowledge about pensions and how they work.
Explaining Pensions to Millennials
As an employer, you may find it helpful to sit down with millennial workers, and any other group that is interested, and explain how pensions work and why they are so important.
Essentially, it is important to communicate that both the company and they contribute the minimum amount to their pension pot each month and that they can picture this as cash back - each time that they add to their pension, the government will refund income tax that you have paid which can help them to make big savings over time. This money is not taxed, and the compound of interest means that the more money that they put in, the larger amount that they save - a snowball effect.
It is likely that people will respond that the current economic situation and cost of living makes it impossible to tuck money aside each month. While this is certainly understandable, especially for younger employees who may not earn large salaries, it is worth explaining that small contributions made regularly over many years will add up to a large amount and provide important peace of mind for their retirement so that they can live these years without having to worry about money.
This should give millennials a basic grasp of the value of pensions and why they should add more to their pot than the basic 3% (going up to 5% in April 2019). Portafina is a useful resource that contains everything that an employee needs to know about pensions. This will include helpful information such as how they should manage their pension, the different types of pension and all the facts and figures to help them make the right decision when it comes to this incredibly valuable savings pot.
Portafina Discovery can be used to help to debunk common myths like:
- “All pensions are the same”
- “It’s too late to make a difference”
- “I’ve got a small pot, I may as well take it all now”
- “I shouldn’t touch my pension before retiring”
Pensions can be confusing, but it is important that all employees are aware of their value and why they should be adding to their pot when they can.
On top of this, it is worth suggesting to staff that they follow the Portafina social media channels, including the Twitter, Facebook, LinkedIn and YouTube pages where there are regular posts on managing your pension and industry news. Visit the Portafina jobs page to see job opportunities that are currently available.