90% of workers view pension packages as important, and will scrutinise them when they are deciding whether to stay with their employer or look for a new job. This reveals pensions to be more influential than any other benefit – including runner-up flexible and remote working (which 76% said was important).
The research from workplace pensions specialist Penfold took in 2,000 employees and 500 SMEs. The resulting data suggests that, while businesses may focus on their pension obligations as an employer, pensions should also be viewed as a powerful tool for staff retention.
Pensions are more important than other financial benefits
After pensions and remote or flexi working, the survey – which ranked employee benefits – found that the benefits you might expect to top the list didn’t come close to pensions. Bonus schemes and salary advances, for example, were named as important by 74% and 65% of respondents respectively.
In addition, employees flagged a generous parental leave policy as important, and health and life insurance both got a mention, as did work socials.
While recent research suggests that freelancers often neglect their pension pot, it’s clear that for PAYE employees, it is an absolute focus.
Pensions as a recruitment tool
Pensions have been found to play a key role when employees are looking for a new job. In the survey, 88% of respondents said that, when deciding whether to join a new company, the pension on offer is a very important consideration.
In its Salary Trends Report 2026, which analysed 21.6 million UK job positions across 22 industries and 21 cities, Totaljobs says that 41% of candidates are looking for or planning to look for a new role in 2026.
By ensuring your company offers an appealing pension package, you’ll be helping to put your business in a good position to avoid losing strong candidates from this group to other hirers.
Untapped potential
While offering a range of workplace benefits is essential, the Penfold team argues that pensions are often underestimated as a tool for retention.
Chris Eastwood, co‑founder and CEO of Penfold, said: “For many employers, pensions still sit quietly in the background. They’re treated as a compliance task: important, but largely fixed. Something you set up once, then move on from.”
He argued that, instead, pensions can be a powerful tool in supporting employees’ “financial wellbeing, morale and long‑term retention”.
With talent shortages in some industries, notably hospitality, canny employers can create pension packages that help them retain their staff, and also use them to attract the best people to help them ride out the current storms.
