Does it matter how financially aware your employees are?
We seem to have hit a low in the UK when it comes to people’s overall awareness of financial planning and what they will do when they retire.
Recent research from Fairstone suggests a high level of unpreparedness for retirement. Only a small percentage of respondents seek independent financial advice, and over 50% of those surveyed have no retirement plan in place.
This is close on the heels of big changes in pensions and people’s freedom of choice in accessing them.
Levels of engagement in personal financial planning are low. At the same time, according to the CBI’s website, we are heading for a personal savings crisis.
Should this matter to employers, or is it simply something individuals must face up to by themselves?
We know that people’s personal lives spill over into their work, and vice versa. We also know that stress has a big impact on the workplace.
Around a third of adults put financial worries at the top of things that cause them stress. Stress can lead directly to:
- Mental health issues
- Long-term sick leave
In other words, employers can feel the impact of their employees’ stress, through disruption to work and lost productivity.
The CBI’s research, in conjunction with the CIPD, has found that:
- At least a quarter of people with money problems find this affects their ability to do their job
- 60% of employers are aware of their employees’ financial issues, recognising that some have insufficient savings, including pensions
Around two-thirds of employers feel it is their joint responsibility, alongside employees, to improve retirement planning and financial awareness.
They can treat this as a form of employee engagement, with all the benefits that can bring, including better retention levels, and improved productivity.
Making a Difference
To build on this successfully, employers must use means that are impactful to get the message across.
The most effective form of financial education is face-to-face. Practically, this translates into intensive group sessions, ideally delivered through a professional, independent training company.
Increasing employee engagement with personal financial planning, and applying financial education and financial awareness in the workplace is effective. 70% of employees who have experienced it say it works, according to the CBI.
Is Financial Planning Worth it?
Financial wellbeing impacts on individuals and on their employers. There needs to be a cultural shift in this country, to help people better prepare for retirement and better manage their money.
Employers can lead the way, and we can offer our full, professional support with the kind of advice and insight that will help employees engage with the idea of financial planning.
To discover more about receiving expert, accessible, financial training for your staff, please contact us.