Steve Webb: How do you get staff to understand how much to save for retirement?

I want employees to engage with their savings, to think about what kind of life they want in retirement and to plan how they will fund it.

However, people who are not near to retirement tend to prioritise other things above their pension savings. That is why we have introduced the duty on employers to enrol staff into a workplace pension, and are bringing in a flat-rate state pension so people know what they are getting from the state.

We have taken the hassle out of saving for a pension. Staff don’t need to take any action; money comes off their pay automatically, and their employer puts in, too.

Already we are seeing low opt-out rates from some of the country’s biggest employers and, crucially, those with the lowest opt-out rates are the ones that have taken the time to engage with their employees. Employers can make a real difference to engaging with the workforce ahead of auto-enrolment.

Employers need clever communications. Not everyone reads a letter, but a recent survey showed that 80% of people read their payslip. For example, Marks and Spencer created bright posters using its Percy Pig character as part of a six-month plan that involved letters, telling staff to check their payslips, information in-store and an online tool to view scenarios.

Meanwhile, Asda has created a dedicated pensions helpline and posters with illustrations of how much employees pay in, how much the employer pays in and the actual reduction in take-home pay factoring in tax relief.

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The first priority has to be giving people a foot in the door to pension saving. Then we can start talking about saving more.

Steve Webb is pensions minister