Promoting social mobility is key to closing the pension industry's talent gap and better serving members from all backgrounds, according to the Society of Pension Professionals (SPP).

The SPP's Diversity, Equity & Inclusion paper warned that a skills shortage, which runs deeper than in other economies, is holding back the UK’s potential, as highlighted in the recent industrial strategy.

It warned that the financial services sector, including the pensions industry, is no exception, citing a Financial Services Skills Commission report, which estimated that the sector could lose 260,000 highly skilled workers by 2035, while a further 116 per cent of the workforce will need upskilling.

Meanwhile, the paper highlighted that senior roles in financial services remain dominated by those from higher socioeconomic backgrounds, who are more than twice as likely to reach the top as those from working-class backgrounds.

The gap widens when other underrepresented traits are considered, with white men from affluent backgrounds 33 times more likely to hold senior roles than women from ethnic minority and lower socioeconomic backgrounds.

This demonstrates that the talent outside the established mould faces significant barriers, according to the SPP.

Therefore, the paper argued that helping people from all backgrounds reach their potential isn’t just good for society, it also helps businesses address the talent gap.

It highlighted that social mobility is particularly important in pensions, as managing savings for people from all backgrounds requires diversity of thought and experience.

For pensions businesses looking to improve social mobility, the paper recommends first collecting data on the socioeconomic makeup of their workforce because this helps businesses identify barriers and design targeted interventions.

In addition, covering work experience costs, removing non-essential degree requirements and establishing mentoring schemes for colleagues from lower socioeconomic backgrounds are also practical next steps, according to the paper.

Organisations seeking to go further can enter the Social Mobility Employer Index for a tailored assessment and report, joining a cohort of firms demonstrating real leadership in this area. This includes SPP members Aviva, Slaughter & May, Hogan Lovells and Fidelity International, which all featured in the Index’s Top 75 social mobility employers in 2024.

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