The ‘silent pay rise’ workers could risk overlooking when considering a new job

Less than a third of working adults feel that how much a firm pays into their pension would be one of three most important benefits they would weigh up when considering whether to accept a job, according to Which?.

Only 31% of people said the level of employer pension contributions would be one of three most important benefits when considering a job offer, ranking behind paid sick pay (53%), flexible working hours (45%) and holiday allowance (45%).

Despite this, most (55%) said they would be likely to give employer pension contributions some consideration when taking a new job.

The survey also indicated older workers are far more likely to pay attention to pensions – nearly half (49%) of people aged 55 to 64 said the level of employer pension contributions would be one the three most important benefits when considering a job offer, compared with just over one in 10 (11%) Gen Z adults aged 18 to 24.

Meanwhile, nearly half (46%) of people paying into a defined contribution (DC) workplace pension did not know how much their employer contributed, according to the survey.

Sam Richardson, Which? Money editor, said: “Our latest research shows that workplace pensions are a massively neglected employee benefit, with almost half of workers we surveyed unsure how much their employer is currently contributing to their pot.

“Every extra pound that your employer chips in can really add up in the long run, but is often a chunk of salary that lots of us overlook.

“Taking just five minutes to check what your workplace scheme entails, and whether your employer offers contribution matching, could really pay dividends in the long run.

“Crucially, if you’re job hunting, seek out this information at the outset.

“We found people are more likely to consider annual leave entitlement than pensions when looking for a new job, but a more generous employer pension is effectively a silent pay rise.”

Under automatic enrolment into workplace pension rules, a minimum of 8% of qualifying earnings goes into an employee’s pension, which includes 3% from the employer. Pension contributions also benefit from tax relief.

Many pensions experts suggest saving more than just the minimum into pensions, amid concerns that people could risk facing a retirement shortfall if just the minimum amount is saved.

Everyone’s circumstances will be different and some people may have other assets they plan to use in retirement to top up their pension savings, such as property wealth, other savings pots or inheritances.

Employees and employers can contribute more than just the minimum into workplace pensions, and many employers do offer more generous amounts.

There are several ways that people can get an idea of whether or not their retirement savings may be on track.

Pensions UK regularly updates its retirement living standards to give people a general idea of how much money they may need to save for the kind of retirement they expect.

Pension providers also have digital tools and calculators to help people understand what size of savings pot they could potentially end up with.

The Government-backed Pension Wise service also offers guidance to people about pensions as they approach retirement.

When those who are unlikely to consider employer pension contributions were asked why, the most common reason given in the survey was that retirement feels a long way off.

Which? said that, as well as making the most of any additional employer contributions available, giving pensions time to grow could significantly boost the value of some people’s retirement pots.

More than 1,200 people were surveyed by Deltapoll in August across the UK.