– Over half of defined benefit scheme members stated pension provision is the most important benefit when applying for a new job, compared with 39% for defined contribution scheme members
– For those aged 35 and older, pension provision is ranked most important, while holiday entitlement is more important for younger workers
When asked what benefits individuals considered most important when applying for a new job, pension provision and holiday entitlement each ranked top for 33% of employees, according to research1 from MetLife Assurance Limited (“MetLife Assurance”).
Moreover, pension provision is the top priority for defined benefit (DB) pension scheme members with over half (53%) stating pension provision as the most important benefit compared to 39% of respondents participating in a defined contribution (DC) pension scheme. Just under a third (32%) of DC members chose holiday entitlement as the number one benefit compared to 23% for those participating in a DB pension scheme.
Wayne Daniel, Chief Executive Officer at MetLife Assurance said: “The difference in attitudes to pensions between DB and DC pension scheme members illustrates the value that is placed on DB schemes by those individuals and the importance of maintaining those schemes for retention and recruitment purposes.”
Those aged 35 and older also rate pension provision more important than holiday. MetLife Assurance’s research reveals that for those aged 35 to 54, 38% said pension provision was the most important benefit when applying for a new job compared to 30% who chose holiday entitlement. Indeed, for those aged 55 to 64, pension provision becomes more and more imperative as a benefit when applying for a new job with almost half (48%) suggesting pension provision was the most important benefit compared to holiday entitlement (20%).
Conversely younger workers rate holiday entitlement higher than pension provision with two in five (40%) of 25 to 34 year olds citing holiday entitlement as the most important benefit when applying for a new job. This compares to just over one in five (22%) citing pension provision as most important. Despite this, 27% of 25 to 34-year-olds anticipate retiring before 60 with just less than a third (28%) saving for more than 15 years of retirement
Wayne Daniel continues: “More needs to be done to educate employees on the benefits of good quality occupational pension schemes. It is a concern that younger people, who are likely to have longer retirements than previous generations, place less emphasis on this valuable asset when applying for a new job.”
Yet concerns over retirement income, whilst felt more keenly among older workers, did transcend the different age groups. For those aged over 45, more than two in five (42%) were ‘concerned’ about not having enough pension income in retirement with 17% ‘very concerned’. Even younger workers are concerned with a third (32%) of those aged 18-34 saying they were ‘concerned’ about not having enough pension income in retirement and 9% said they were ‘very concerned.
Wayne Daniel continues: “Whilst many people are being squeezed in terms of disposable income, it is essential that people start planning for their retirement at a younger age. The onset of auto-enrolment later this year will help aid the shift towards a savings and pensions culture. However, it will also be vital that people are educated to understand the levels of contributions necessary to provide for a comfortable retirement.”
Of the total of women who took part in the survey, (38%) believed holiday entitlement to be the number one benefit when applying for a new job compared to 31% stating pension provision.
Wayne Daniel concludes: “Although these results are close, given that women are more likely to have less retirement income than men, more work needs to be done to highlight the importance of saving. Women are often the primary carers and, as a result, have a more fractured work history due to the need to take career breaks. With less time in the workplace than their male counterparts, it is essential that they save as much as possible while they are in employment in order to avoid being entirely reliant on the State or their family in retirement.”
Overall, both male and female respondents placed low importance on company share schemes and childcare vouchers with just 18% and 12%, respectively, of respondents citing them in the top three benefits when applying for a new job.