Justin Corliss, technical and pensions expert at Royal London, examines the results of the recent study by Royal London into workplace pensions and what’s needed to improve engagement and so achieve better outcomes for workplace savers.
With ongoing concerns about saving adequacy, it’s important to periodically assess where we stand and identify opportunities to accelerate progress. In November 2025, Royal London published its third annual Workplace Pension Report, designed to spark meaningful dialogue among pension providers, advisers and employers on how best to support employees to achieve the lifestyle they want in retirement.
Pensions are a crucial workplace benefit, ranking second only to salary*. While this highlights their value, it doesn’t necessarily mean employees are highly engaged with their future retirement income. The Retirement Living Standards (RLS), developed by Pensions UK (formerly the Pension Lifetime Savings Association), have become a useful assessment of retirement income needs among pension professionals and providers. However, only three in ten pension scheme members are aware of and understand the RLS*.
Without a clear, realistic goal, people often find it difficult to stay engaged. The research found that employees, on average, believe they’ll need an income of over £58,000 a year for a good standard of living in retirement. For comparison, the RLS quote £43,900 for a ‘comfortable’ retirement in a one-person household, assuming there are no mortgage or rental costs to cover. Nearly one in eight survey respondents think they’ll need £100,000 or more. This is concerning because unattainable goals may lead to disengagement. It’s vital that retirement goals are framed in a way that feels achievable to pension savers.
Workers typically turn to employers, advisers, and providers for support with their pension. Therefore, to maximise impact, it is essential we deliver clear, consistent messaging.
For example, employer matching, where employers match employee pension contributions above the automatic enrolment minimum, is widely offered, usually with a cap. Our research suggests almost 4 in 10 (38%) employees take up employer matching to boost pension contributions. One in four (26%) say their employer does not provide it, A further 14% say they are offered this benefit but choose not to take advantage of it – however, approximately one in five (22%) don’t know whether their employer offers matching. Not knowing whether your employer offers pension contribution matching is a strong indicator of disengagement, as it ignores a key tool for achieving a better retirement income.
Three key factors for pension growth
There are three factors that have a particularly significant impact on pension value at retirement:
– Starting early: Automatic enrolment helps address this, but employers and advisers should discourage people from opting out or delaying their start.
– Increase contributions with pay rises: While not necessary with every pay rise, increasing pension contributions even every five years can make a substantial difference to the ultimate retirement income pot.
– Employer matching pension contributions: Unless someone is struggling with pension input limits or affordability, it’s rarely in their best interest to decline the offer of employer matching contributions.
Employer benefits and communication
Employer matching should not just be viewed as a cost, rather, it’s an investment in attracting and retaining the best talent. However, some employees aren’t aware of this or other benefits, meaning it’s a missed opportunity. Employers need to find ways to broadcast this important information and continually develop new strategies to reach those who missed previous communications. Scheme websites, pension apps, infographics, and seminars, whether face-to-face or virtual, all have a role to play. Employers, in conjunction with the scheme adviser, should explore which methods best suit their workplace.
The importance of financial advice
Providing advice or guidance to pension scheme members can positively impact the workplace. Those who take financial advice are more likely to switch pension investments aligned to their risk appetite, make one-off contributions, or transfer pensions. Yet, over half of employees have never sought advice or guidance relating to their workplace pension. Only 27% of employees with a pension feel comfortable that they are saving what they need for retirement, but this rises to 41% among those who have sought guidance or advice in the last year. Royal London’s annual ‘Value of Advice’ research** highlights peace of mind as one of the most valued aspects of the advice process. Other research shows that financial stress can impact employees’ productivity and absenteeism. Providing advice or guidance to pension scheme members is likely to have a positive impact in the workplace. Employers, advisers, and providers should pool their resources to create bespoke models that work for their workforce and budget.
The future of workplace pensions
Workplace pensions will increasingly form the backbone of retirement income and are an important tool for attracting and retaining employees. Advisers who are aware of robust research findings from thousands of employees and share these insights with employer clients can help create not just good, but great, outcomes for scheme members.
* Research from Royal London in its ‘Workplace Pensions Report 2025’ – the workplace pensions research was conducted between 4th and 14th July 2025 on a sample size of 4,000 UK workers with a pension, of whom 3,404 had a workplace pension.
** Research from Royal London’s ‘Value of Advice’ report – the adviser research was conducted with the lang cat’s 1300+ strong Adviser Research Panel during September and October 2025.
The consumer research was carried out by Opinium between 3rd and 13th October 2025. The sample size was 2,000 UK Adults, with the results weighted to be nationally representative.
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