Help younger employees turn confusion into confidence with pension communications that inspire action and build lifelong financial wellbeing.
In today's rapidly evolving economic landscape, the financial wellbeing of younger employees is under increasing pressure. Issues are well publicised, such as rising living costs, student loan debts and housing affordability concerns. Combined, these push pensions lower down the priority list for workers in the early stages of their careers1. However, this delayed engagement with retirement planning and pensions has serious long-term consequences.
The Financial Reality for Younger Generations
Millennials and Gen Z face a drastically different financial environment than what their parents and grandparents faced at the same age. Auto-enrolment has been great in expanding pension coverage; however, engagement with pensions remains low. Younger workers often:
- Don't understand how pensions work,
- Underestimate the value of early contributions and the impact of compounding,
- Are sceptical of the pension systems.
This group is also typically more financially anxious and more digitally engaged than ever before – highlighting a clear opportunity for interventions through more effective and tailored communications.
Financial Wellbeing begins with Retirement Planning
We've highlighted some of the stressors workers are currently facing. These stresses have combined to push financial wellbeing into the limelight for both employees and employers. Financial wellbeing is intrinsically linked to mental health, productivity and workplace retention. While short term goals like budgeting and saving are critical, long-term planning for retirement gives a sense of stability.
By connecting pension planning to broader themes of independence, freedom and lifestyle goals, this can help to make the topic emotionally relevant to younger employees. Framing pensions as a tool for building the lifestyle you want rather than just being a 'future issue', is a key psychological pivot that communication strategies must adopt.
Barriers to Engagement
There are many emotional and cognitive barriers that prevent effective pension engagement among younger demographics, including:
- Present bias – There is a tendency to prioritise the here and now over the future.
- Complexity and jargon – Pension documents are well known for being laden with technical language that can alienate and disengage further.
- Lack of trust – Economic volatility has eroded confidence in institutional systems.
- Perceived irrelevance – Given that for the younger workforce, retirement is distant and far away, this can make it feel intangible and 'tomorrow's problem'.
Overcoming these barriers requires more than just information, it demands connection.
Their First Jobs
For someone starting their first job, pensions can seem like a distant, abstract concept – something to worry about later. But the early stages of employment are a pivotal time to build strong financial habits, and pension communication can play a crucial role in that journey. The way pensions are introduced at the outset can shape not only how an employee understands their retirement savings, but whether they engage with it at all, throughout their career.
Effective pension communication helps demystify what can otherwise be a confusing topic. New starters might be completely unaware of things like automatic enrolment, the long-term value of employer contributions, tax relief and the superpower that is compounding.
Left unexplained, it can just feel like another deduction taken away from their earnings. But, with the right framing – simple, jargon free language, and a clear explanation of what's happening and why – it can become a positive moment of empowerment and long-term engagement. This is a great chance to show them that retirement saving is about gaining financial independence and freedom of choice later in life.
A great place to start is the monthly payslip. It's one of the most underused yet powerful tools for pension education and engagement. It's a familiar, routine touchpoint providing tangible evidence of both employee and employer contributions. For a first-time worker, seeing these amounts laid out clearly, with a short, friendly line explaining what's been added to their pension pot can be a lightbulb moment. It makes their pension feel real and in monetary terms as opposed to a percentage. Some employers even include contextual messages within the payslips such as 'You've earned £50 in pension contributions this month – your future self-thanks' you'. This helps to build emotional engagement from day one. Over time this will create the foundation for better decision making, greater confidence and long-term financial wellbeing.
The first job is a teachable moment. Starting with something as everyday as the payslip can help to start employees on the journey of lifelong financial literacy and can help to build trust in the value of long-term savings.
The Power of Effective Communication
Here are steps to take to shift:
- Personalisation – Digital tools can be utilised to tailor pension communications to an individual based on age, career stage, goals, behaviour etc. Projected outcomes and real-time modelling based on actual contributions make it relevant and can create immediacy.
- Clear and conversational – Ditch the jargon and instead use storytelling, analogies and plain everyday language to bring it to life. This can be as simple as relating pension saving to everyday decisions.
- Emotionally resonant – Highlight freedom, future possibilities and peace of mind. Communications should speak to an individual's values, rather than fear or obligation, speaking to values are likely to resonate more deeply. Video content, testimonials, and influencer style explainers can boost relatability.
- Digitally native – You need to meet your employees where they are – on smartphones, social platforms and gamified apps. Incorporate nudges and microlearning to maintain longer term engagement.
- Integrated with broader wellbeing initiatives – Frame pensions as part of a holistic financial wellbeing package that includes budgeting tools and debt advice. If an individual has large credit card debt or is in the process of saving to get on the property ladder, their focus is likely to be on those short-term financial issues/goals. When people feel supported in the now, they're more open to thinking long term.
Fostering pension engagement among younger generations is a strategic imperative. Retention, productivity and employee loyalty are all strengthened when staff feel financially secure and supported. The challenge of engaging younger employees with pensions is not a question of motivation but of meaning. When pension communications are personal, purposeful and emotionally intelligent, they can do more than inform, they can inspire. In doing so they not only foster financial resilience but also build a culture of long-term wellbeing.
We can help you reach your members with clarity and confidence. Contact us today.
Source
1. Pensions Policy Institute, 2025. The Concerns of Gen Z. Available at: https://www.pensionspolicyinstitute.org.uk/media/sihn1rfm/20250226-the-concerns-of-gen-z-final.pdf [Accessed 14 August 2025].
