Pensions are a significant part of the HE employee value proposition
By Paul Mason, Director of Pensions Strategy, UCEA
18 September 2025
I joined UCEA back in June as Director of Pensions Strategy, leading our work on pensions initiatives. Having previously only worked in the private sector I found the range of similarities and differences highly interesting. Pensions are a significant part of the sector’s reward package and are important to HE employers in order to continue to attract and retain high-quality academic and professional services staff.
Pensions Awareness Week (PAW) is a great opportunity to remind employees and scheme members to review their pension savings and, if appropriate, think about making changes to better prepare themselves for retirement.
The main pension schemes in the HE sector – TPS, LGPS, USS, SAUL and NHSPS - have a range of tools to help their members plan for the future. I encourage HEIs to communicate to their employees the importance of engaging with their pensions and to help them prepare for retirement, whatever their age.
EVP in HE
Within HE, pensions are a significant part of the employee value proposition (EVP), both for academics and professional services staff. Employees should understand the value of their pension benefits and how these will support them, and their families, in later life. Our sector is perhaps unusual in that many staff will remain working in HE, even at the same institution, throughout their career. However, this is far from the norm and will not be the case for all HE staff. Within the UK, most individuals will have eleven different jobs during their working lives (source: ABI) and some will have considerably more. This means that workers may have a mix of Defined Benefit (DB) and Defined Contribution (DC) pension savings too. Understanding what retirement income looks like when they retire can be very complex and we all in the sector have a role to play in making this easier for them.
None of us know what will happen in the future. A pension is like insurance, but it’s different. It will pay out if you reach retirement age and, in some situations, can be accessed prior to this time, although this will reduce retirement benefits. Often, it will also pay out to your spouse or family if you die before retiring. Alongside this, the State Pension provides a good safety net, but it is unlikely to provide a pension income that many will consider sufficient for the lifestyle they would like in retirement. Furthermore, the State Pension may not remain in its current form. The government has announced a further review of the State Pension Age (SPA) and the Office for Budget Responsibility has raised concerns about the sustainability of the State Pension ‘Triple Lock’. Employer and individual pension provision is perhaps more important than ever. Over the summer the government launched a new Pensions Commission tasked with considering the long-term future of the UK’s pensions system, including exploring the barriers stopping people from saving enough for retirement. Saving into one of the HE sector’s pension schemes gives HE employees a better chance of enjoying the retirement they would like.
Improving Benefits
Across the main HE schemes we see strong take-up, with around 9 in 10 people accruing pension benefits, but let’s not forget the c.10% who are not saving for their retirement. This is a sizeable number of people who are not benefitting from employer contributions, death in service cover, government tax incentives and a chance of a comfortable retirement. The main reasons for opting out are affordability as well as an expectation of returning to a home outside of the UK in the future. Once employees opt out they will generally not be contacted again about pension options until the statutory requirement to re-enrol them three years later.
In an effort to ensure that a diverse HE workforce, including those opting out above, has a suitable retirement savings option, around fifty HEIs expressed an interest in the development of a sector-wide DC scheme. This has led to the launch of the FlexHE pension arrangement provided by Aviva.
Whilst developing the FlexHE pension arrangement it became clear that HEIs are increasingly looking to enhance their reward offering. An important element of this is flexibility and being able to provide a diverse workforce with greater choice in relation to pay, pensions and accompanying benefits. UCEA therefore supported the procurement and selection of a flexible benefits platform, the Hapi platform provided by Personal Group, to help HEIs deliver this.
Another area I’d like to highlight is the gender pensions gap. The gender pay gap in the wider economy (and in HE) points to women generally earning less than men in their careers. There are a number of factors contributing to gender pay gaps including that women are more likely to take career breaks for childcare and other care-giving responsibilities, working part time or working below their potential when re-entering the labour market. The impact of divorce, and other life events, may also have more of a negative impact on women’s pension positions. Given HE pensions make up a significant part of total reward whilst they are working, it is important that employees are made aware of the impact on their pension benefits when they make changes to their working patterns. Additionally, they should be made aware of their options to ‘make good’ any missed contributions, if appropriate, for both their employer pension and the state pension. This is an area UCEA will be working on with HEIs.
These examples highlight UCEA’s ongoing commitment to supporting the sector in its continued effort to consolidate and improve pensions awareness for employees in HE. Pensions Awareness Week is a welcome reminder that, with the help of employers and scheme providers, employees should engage with their pensions and plan for the future - and yes, that includes me, and you!
For more information about UCEA's work on pensions, please visit the pensions pages of the UCEA website.
