Why are pensions and savings the secret engagement strategy for young workers?

Gen Z (those born between 1995 and 2005) and Millennials are focused on building their careers, but in so doing, many are missing out on building their financial futures, with 29 per cent of 18 to 25-year-olds having never once contributed to a pension. With employee financial wellbeing an intrinsic feature of successful employee engagement, how can you support young workers?

For many younger employees, pensions feel distant, confusing, dull, and not particularly urgent. Many are navigating the challenge of rising living costs and student debt, so financial planning is focused on pay day to pay day, and a desire for financial flexibility.

Little surprise that future financial planning and long-term savings are often not a priority, as demonstrated by the findings of a Money & Pensions Service survey. The research involved 2,000 18 to 25-year-olds across the UK, and found that 29 per cent of those in work have never contributed to a pension, and only 54 per cent are currently doing so. While 87 per cent of young people are saving in some form, more than half (51 per cent) are focused on milestone goals like buying a home or getting married.

Just 13% are saving for retirement.

The power of employee engagement

Employee and worker engagement is directly linked to productivity rates. The higher the engagement, the greater the productivity of the employee and worker. The data shows that engaged employees are 21 per cent more profitable for their employer than disengaged workers, and companies with high employee engagement experience a 59 per cent lower staff turnover rate.

Low interest in work can be linked to several people issues that can limit business efficiency - from absenteeism and poor performance to employee burnout and wellbeing struggles.

Financial wellbeing

Employee financial wellbeing is a major contributor to overall mental and physical wellbeing. Stressed employees are more likely to be distracted and disengaged. Those feeling financially secure are more productive, motivated and loyal.

With money being one of the leading causes of stress, supporting workers and employees to improved and future-ready financial wellbeing and security will boost their overall engagement, happiness and productivity.

The key lies in giving them the tools to improve their financial knowledge and confidence, which in turn will foster both a healthier relationship with money and better mental health.

With current estimates indicating that Gen Z currently account for approximately 27% of the global workforce, rising to around 31% in 2035 when they will total two billion people worldwide, addressing the financial wellbeing of your younger workers is an investment strategy in the future of your business and its current and future workforce.

Encouraging the younger generation employees to engage with pensions and savings isn’t just a nice to have – it really is a strategic move, and one that also supports retention, strengthens employer brand, and shows you’re invested in your people’s futures. 

Top tips to engage Gen Z and Millennials employees in pensions and savings

1. Make pensions relevant by linking them to present-day priorities
   

   • Offer workplace savings options like ISAs alongside pensions.

   • Run workshops on saving for milestones like travel, property, or emergencies.

   • Bundle pension education with financial wellbeing support on budgeting and debt.

2. Use simple, punchy communication styles  

   • Speak their language. Social media is now the primary financial information source for 45% of young people. Gen Z and Millennials consume content in short-form videos, memes, and reels.

   • Keep communication and information short, simple and visual.

   • Share bite-sized tips via email or digital channels like Teams and Slack.

   • Use explainer videos or animations to break down pension basics.

   • Create FAQ-style content that clearly answers “What’s in it for me?”.

   • Help them see the long-term impact of early saving. 

   • Younger workers often don’t realise just how much of a head start they can gain by beginning their pension contributions early. So show them how time and compound growth work in their favour. Use visuals to show how starting at 22 compares to starting at 32.

   • Highlight the ‘free money’ available to them from employer contributions and tax relief.

   • Share relatable retirement income goals.

   
   

3. Connect pensions to their values
   

   • Gen Z cares deeply about the planet and ethical business practices.

   • Promote any ESG (environmental, social and governance) or sustainable investment choices in your pension plan.

   • Share how pension savings can fund climate-positive or ethical companies.

   • Let them know how they can influence where their money goes.

4. Turn dry topics into engaging activities, games and entertainment
   

   • Learning doesn’t have to be dull, and gamification can make it engaging and memorable.

   • Host a pension-themed quiz or interactive challenge.

   • Use TV show game formats in team sessions.

   • Offer prizes for engagement, such as completing financial education modules.

5. Make pensions and savings a visible, supported part of your workplace culture  

   • Feature pensions in onboarding and early-career development.

   • Promote one-to-one sessions with a pension expert.

   • Celebrate Pension Awareness Day with events or campaigns.

   • Involve  your 18-21-year-old workers who aren’t yet auto-enrolled.

Value and role of employee benefits

Employee benefits are a significant and cost neutral solution that employers can use to provide their workforce with tangible financial support. They have the potential to play a huge role in enhancing an employee’s life, both at and away from work, and enhance employee engagement, recruitment and retention strategies, and worker and business productivity levels.

The benefits app from Magic Connect has everything employers need to boost engagement thanks to our game changing solution that brings everything together in one place. The app supports work life balance, physical and financial wellbeing, and personal professional development, with everything all in one app, which is a complementary add-on element of our expert partner payroll solutions. Find out more here.