Nearly two in five small and medium-sized enterprises (SMEs) are considering switching their workplace pension provider within the next three years, according to new research from People’s Pension.
The research reveals that a dip in investment performance is the single strongest trigger for switching, cited by almost a third of employers (32%). Cost pressures and regulatory or policy changes follow closely, each cited by just under a third (31%), underlining that value for money and compliance concerns remain central to employer decision-making.
A quarter of SMEs (25%) say they would also consider switching following a recommendation from a trusted adviser or peer, or because employees were unhappy with their current provision.
People’s Pension serves more than 100,000 employer clients and over seven million members. The research reflects the operational challenges faced by many SMEs, which often manage payroll, regulatory change, and employee engagement with limited internal resource.
Despite the notable level of switching intent, employers are clear about what would make them less likely to move provider. Nearly half (45%) say better communication or education for employees would reduce their inclination to switch, while two in five (40%) point to additional employee support — including financial wellbeing provision — as having the same effect.
People’s Pension distribution director Stuart Reid said, “Employers are under pressure to keep payroll and benefits running smoothly, often with limited time and resource to deal with complexity or inconsistent performance. When pension provision becomes a source of friction, switching quickly moves onto the agenda.
“Investment performance and cost remain fundamental, but expectations have evolved. Employers increasingly expect providers to deliver dependable service, clear communication and meaningful support for their employees alongside strong long-term outcomes.
“For providers operating at scale, that means combining robust governance and investment discipline with operational resilience and support that genuinely reduces the burden on employers.”
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