New research by Penfold – a digital pension provider – has revealed that 61 per cent of British workers are not confident that the value of their pension pot will be enough to live on in their retirement. In addition, to date 37 per cent have absolutely no idea how much they have saved.
Despite adapting to virtual meetings and embracing remote working, which has made the workforce more tech-savvy, pensions – which should be one of the most beneficial workplace perks – remain dated and unchanged. Even after the introduction of auto-enrolment nine years ago, workers are failing to participate in the management of one of their largest investments.
According to Penfold, this is due to a lack of technological innovation in the pension space – a problem which can be solved by use of their new app, whose features such as open banking will allow users to access their pension quickly and confidently, whilst also allowing simple processes such as payroll integration - helping employers and HR teams manage pensions more efficiently.
Pete Hykin - co-founder of Penfold - said:
“Auto-enrolment was introduced in 2012 as the answer to all our pension problems – however, it’s definitely not solved the issue. Auto-enrolment is - in reality - a nightmare for HR teams to set up and so, more often than not, employees are handed a Nest pension where they receive one annual paper statement a year, often to an out-of-date address, and no guidance on how to save for the future. Employees then lack any engagement or interest in it and often mistakenly just assume they may be covered for retirement when they most definitely are not.”
In 2019, Penfold set up an app which transformed the savings of over thirty thousand self-employed in the UK, providing them with a simple, flexible, digital way of saving for their retirement and is said to be as easy to use as online banking.
Penfold is now ready to do the same for employed workers - launching one of the first workplace pensions.
Pete Hykin said:
“We’ve rebuilt the back-end pension infrastructure from scratch to allow all processes to happen instantly, quickly and flexibly. For savers, our product uses open banking to allow workers to seamlessly top up their pensions independently of their employer contributions – just like an online bank account. And importantly, it notifies them when their employer contributes to their pension which we know from our research can significantly boost engagement and interaction with their savings. And, for employers and their HR teams, automated complex processes like Salary Sacrifice take the headache out of pensions. We also offer a pension education programme to businesses to ensure they maximise the potential their pension scheme has for engaging their employees.”
He added:
“The most exciting thing to see amongst people who engage with their pension is not just the total mounting up but also the activity on the app. Users log into Penfold on average ten times a month to add more, see employer or HMRC contributions, pause additional payments etc They are engaged and involved in their savings – something which is essential in changing the way people view pensions.”
