Employers want workplace pension providers to prioritise practical tools that help employees make better financial decisions, rather than innovation for its own sake, research from Royal London has shown.

The study of 960 employers with workplace pension schemes found that more personalised pension planning tools were selected as an innovation priority by 23 per cent of respondents, while 20 per cent highlighted tools to support employees through different life stages and 18 per cent wanted more guidance and information on investment options.

Royal London said the findings suggested employers increasingly expected workplace pension providers to go beyond scheme administration and provide support that improved employee engagement, understanding and decision-making.

However, Royal London head of workplace proposition, Catherine Stewart, noted that different employers will need different types of support depending on their size, workforce, and benefits strategy.

"Working with providers, advisers can help employers cut through the noise and focus on the areas of innovation that will make the biggest difference to their employees,” she added.

The research also found that priorities varied according to employer size.

Larger firms with more than 250 employees, were more likely than smaller businesses with fewer than 50 employees to prioritise improved digital platforms and user experience, at 22 per cent compared with 13 per cent.

They were also more likely to prioritise broader financial wellbeing support (13 per cent vs 9 per cent), sustainable and ESG-focused investment options (12 per cent vs 6 per cent), and AI- or technology-driven financial advice (17 per cent vs 7 per cent).

In contrast, 19 per cent of smaller employers said they did not believe any further innovation was needed, compared with 7 per cent of larger businesses.

Stewart explained: “For smaller employers, the priority may be making workplace pensions easier to manage. For larger employers, pensions may increasingly form part of a wider employee benefits and workforce wellbeing strategy.

“This is where tailored advice matters. A workplace pension scheme should reflect the needs of the business and the workforce it supports.

“The best innovation is not necessarily the newest feature, but the one that helps employers and employees achieve better outcomes.”

Core pension features also remained important, with 46 per cent of employers selecting competitive fees and charges, 43 per cent highlighting strong investment performance, 39 per cent easy-to-use portals and tools, and 35 per cent reliable customer support.

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