Since the introduction of automatic enrolment back in 2012, workplaces must provide a pension scheme by law. As a business owner, you’ll be well aware of your responsibilities in this area. You no doubt gave considerable thought to the scheme you chose, but have you reviewed it since?

Regularly reviewing your business’s workplace pension scheme can help to make sure that admin charges remain competitive, investment options fully reflect the needs and values of your workforce, and that systems and functionality are keeping pace with your employees’ needs.

As arguably the second-most valuable benefit you offer your staff – after a salary – a scheme review can help your business retain the best staff and recruit the brightest new talent.

Keep reading for a look at how a workplace pension scheme review could benefit you, your employees, and your business.

7 important reasons to regularly review your workplace pension scheme

1. A scheme change could mean lower charges

The workplace pension market is dominated by some key players, like NEST and the People's Pension. If you set up your business’s scheme as a result of auto-enrolment, you might have opted for one of these more visible providers.

But, just as your business has developed over the dozen years since, so too has the workplace pension market.

As more providers emerged, so too did the level of competition. One way in which this might be immediately apparent is in the charges levied.

You might be liable for annual management fees, admin costs, and transaction fees. While some of these might be small, when combined, and paid over years, they can quickly add up.

The trend of fees has been downward, as new providers seek to be competitive in their market. Older schemes, though, aren’t always so quick to keep up.

Check in with your older scheme now to ensure the charges you pay are in line with those offered elsewhere in the market.

2. You might have the option to align funds with your employees’ values on sustainability issues.

You might have opted for your scheme’s “default” funds at the outset, while giving your employees the option to move funds if they wish. But how many alternative funds are available and how diverse are they?

As ESG investment has gained supporters over recent years, it's increasingly likely that at least some of your employees will want to align their money with their values on environmental, social, and governance issues.

Reviewing your current scheme could highlight a lack of options in this area. Switching to a new scheme, when and if this is an option, might also better align the scheme with your values, and that of the business.

You can read more about the rise of ESG investing and upcoming changes to FCA rules in our latest blog.

3. Ensure your pension offers the most up-to-date interactivity and is user-friendly.

As the workplace pension market has become more competitive, it has also moved with the times. Your current scheme might offer online portals and mobile apps that allow your employees to track the progress of their investments, switch funds, or access policy documents online.

If your current scheme doesn’t offer this kind of flexibility and user-friendliness, it might be time to find one that does.

A change might even increase your employee's engagement with their workplace pension.

4. Search for workplace pension schemes that offer additional benefits

Many leading providers offer additional benefits alongside a pension. These might include salary sacrifice (more on which later), protection benefits like death in service, or access to finance professionals.

The latter can be especially useful for higher-paid members of your team, who could have more complex tax issues to consider.

Your older scheme might not offer these added benefits so check in to make sure that your employees aren’t missing out.

5. One valuable benefit that older schemes might not include is salary sacrifice

As we have seen, many leading and newer schemes will likely offer salary sacrifice. This has huge benefits for your employees and your business.

Salary sacrifice reduces an employee’s salary in exchange for a benefit, in this case, pension contributions. Your employees effectively earn less, reducing the Income Tax and NI they have to pay. This reduction can sometimes offset the drop in salary and see their take-home pay rise.

Salary sacrifice can also mean immediate savings for your business by lowering the National Insurance contributions (NICs) you pay as the employer. The more staff who sign up for salary sacrifice, the better.

You can find out more about this topic, and see a breakdown of the savings you might make, by reading ‘Why salary sacrifice could benefit you and your employees’, our recent blog.

6.  A review could help you attract new employees and retain current ones

A YourMoney survey originally published back in 2022 found that a workplace pension is the third most important draw for prospective employees, behind only work-life balance (82%) and salary (80%).

Reviewing your pension scheme could help you attract new talent while retaining the key personnel integral to the smooth running of your business.

You might have read our recent blog, ‘3 surprising but profitable reasons to improve your employee benefits’, in which, we looked at research into why happier employees are more productive. Improving your staff’s emotional wellbeing through a competitive workplace pension could improve engagement, with financial benefits for the business over the longer term.

7. Enhance your business’s reputation

Never underestimate the importance of brand perception. Employees talk about their employer, and happy and valued staff, with high levels of emotional and financial wellbeing, will help to form a positive perception of your business in the wider market.

A competitive workplace pension, flexible enough to align with your staff’s (and your business’s) values, could improve public perception of your brand, and your overall reputation.

Get in touch

If you have any questions about your business's current workplace pension scheme, speak to us now. Please contact us to talk about what we can do for you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The value is not guaranteed, and the fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. Any advice or considerations are personal to each individual’s circumstances and the tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pension Regulator. Advice on auto-enrolment pensions is not regulated by the Financial Conduct Authority.