Adapting to virtual meetings, embracing remote working, even adopting virtual work avatars – over the last 18 months the UK workforce has never been more tech-savvy. And yet pensions, which should be one of the most impactful and beneficial workplace perks remain archaic and unchanged.
Despite the introduction of auto-enrolment nine years ago, savers’ engagement with one of their biggest lifetime investments is still falling short.
New research by Penfold has revealed that three-fifths of Brits (61%) are not confident the value of their pension pot will be enough to live on, while over a third (37%) have absolutely no idea how much they’ve saved to date.
And this, says Penfold, is down to a lack of technological innovation in the pension space, which is where its new app will change the game for HR teams and tech-adopting employees alike. Features such as open banking will allow users to quickly and confidently access their pension, while simple processes such as payroll integration help employers manage pensions more efficiently, saving time and money.
Pete Hykin, co-founder of Penfold, explains: “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often than not, employees are handed a Nest pension where they receive one annual paper statement a year, often to an out-of-date address, and no guidance on how to save for the future.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.”
Penfold, the digital pension provider set up in 2019, originally revolutionised the savings of over 30 thousand self-employed Brits. Its platform provided them with a simple, flexible, digital way of saving for retirement – an app which users claim is as easy to access and manage as online banking.
Now, two years on, Penfold is set to do the same for the employed market, becoming one of the first fintechs to launch a workplace pension.
Pete explained: “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.”
Hykin says the business was based on personal frustration with the industry. Despite working in the financial services industry for many years he found setting up a workplace pension for employees difficult, complex and painful.
“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.”
Initially targeting the SME market, Penfold pensions take less than five minutes to set up and users are offered choices between sustainable, shariah, high, medium or low risk investments. The ‘Have Your Say’ dashboard allows savers to view where their cash is invested and shows which businesses have annual general meetings coming up and what is being discussed, so users can tell their fund managers how they think they should vote and take a stance on issues that are important to them. The fund managers submit the legal vote on behalf of savers and report the final outcome through the dashboard.
‘Find My Pension’ also allows savers to consolidate old workplace pension pots into one place, by simply providing the name of their former workplace – Penfold does the rest.
The Penfold workplace pension is available to any UK-based business with more than five employees. For more information visit https://getpenfold.com/workplace
Case studies available:
Fanbytes is the UK’s number 1 Gen Z agency, specialising in social media and influencer marketing for brands looking to win with Gen Z. They have over 50 employees based out of their London office. They appointed Penfold as their auto-enrolment pension provider earlier this year.
Sarah Cran, People & Culture Partner at Fanbytes, said: “Our auto-enrolment pension scheme is our most expensive employee benefit and, until we onboarded Penfold, the team barely noticed it. We’re now able to demonstrate to each employee how much we’re investing in their future each month and the response has been overwhelmingly positive since the switch over. We’re confident that our pension scheme is now working hard for us to improve employee engagement and retention. In today’s competitive job market, providing tangible reasons for great talent to join and stick around has never been more important.”
Uncommon, a coworking space with four locations across London and over 40 staff has become one of the first businesses to offer its 40 employees Penfold workplace pensions as a benefit.
Magda Jedrychowska, Uncommon FD, said: “As an employer, we were looking for a more flexible and interactive pension platform for our team. Penfold gives our employees the opportunity to choose how their money is working for them, and having different investment options including sustainable ones was very important to us. The app significantly increased our team’s engagement as everyone has full control and visibility of their savings, seeing their pension pot grow regularly.
“The implementation was very easy and smooth, most of the transitional tasks were performed by the Penfold team and they really supported us in this change process.
“I personally found the app extremely engaging and easy to use, it was very quick to transfer my previous pension pots and I was able to adjust the risk and the plan immediately. It’s very flexible and I can contribute additional funds on top of my regular monthly contributions. It’s really great to see the pot increase month on month, each time my employer contributes.”