FAQs – Workplace Pensions
Workplace pension, how does it work?
A workplace pension is a way for employees to save for retirement with help from their employer. Contributions come from the employee, the employer, and tax relief from the government. Everything is paid in automatically, making it an easy way to build long-term retirement savings over time.
Is a workplace pension mandatory?
Yes, for most employers. Under auto-enrolment rules, businesses must enrol eligible employees into a workplace pension and contribute towards it. Employees can opt out, but they must first be enrolled if they meet the criteria.
What’s the difference between defined benefit (DB) and defined contribution (DC) pensions?
A DB pension provides a guaranteed income in retirement, usually based on salary and length of service.
A defined contribution DC pension is based on how much is paid in and how investments perform. The final retirement outcome isn’t fixed and depends on the value built up over time.
What should a business consider when setting up a pension scheme?
Businesses should think about cost, employee demographics, and how the scheme fits into their wider benefits strategy. It’s also important to consider communication, how employees will understand and engage with the pension once it’s in place.
What’s our role as an employer after auto-enrolment?
Auto-enrolment is just the starting point. Employers need to keep schemes compliant, ensure contributions are correct, and support ongoing engagement. Helping employees understand their pension can make a big difference to long-term outcomes.
What role does financial advice play in workplace pensions?
Financial advice helps employees make informed decisions about their pension, from understanding contributions to planning for retirement. It can also support employers by improving engagement and helping employees feel more confident about their financial future.
How can employees access personalised financial advice?
Employees can access personalised financial advice through employer-supported services, including regulated financial advisers and digital advice tools.
One example is MAP (Money Advice Platform), a digital financial advice solution that helps employees understand their options, model different retirement scenarios, and make more confident financial decisions. It’s designed to make advice more accessible at scale, while still feeling tailored to individual circumstances.
This kind of support can sit alongside traditional advice, giving employees more ways to engage with their finances in a way that suits them.
Do you run workplace pension or financial wellbeing events?
Yes, we deliver interactive workshops and employer sessions that help teams understand pensions and make better financial decisions. Sessions can cover everything from auto-enrolment basics to broader financial wellbeing topics and are available both online and in person.