Financial education in the workplace
The festival season is in full swing. Glastonbury may be over but other festivals such as Latitude and the Cambridge Folk Festival will soon be attracting visitors to listen to their favourite musicians and bask in the summer sun, writes James Bolton, Employee Benefits Partner at Scrutton Bland.
Barclaycard estimates that festivalgoers will spend £1.2 billion on food clothes and merchandise – which all sounds very lovely, until you think about these people’s other 261-odd working days each year and read the data on financial stress in the workplace.
Research compiled in 2018 by Neyber, an online financial services firm reported some alarming statistics for employers:-
- 63 per cent of employees have been negatively affected by financial worries in the last year
- 45 per cent say money concerns affect their performance at work
- 10 per cent said that they couldn’t focus during the day
- 26 per cent lost sleep
- 20 per cent felt depressed
- 35 per cent said that they had generally felt stressed about money in the last year
With this backdrop it isn’t surprising that a growing number of employers are trying to support their staff by delivering financial education and support. This valuable initiative can be delivered in many ways, from webinars and presentations, one-to-one meetings to financial education hubs and online portals.
There are many specialist organisations offering support in this area and it is important for a business to work with the right firms and tailor a plan that will deliver appropriate solutions for their particular employees and which is targeted to meet their needs.
Companies such as Neyber offer financial wellbeing tools, calculators and guides alongside products to consolidate loans and investments to achieve competitive rates. Hatch works with employees to create a financial plan to achieve their own personal goals at a low cost.
Nudge uses AI and machine learning to deliver a ‘nudge’ or nugget of Financial Education to employees explaining what might change, the impact and required actions. Smarterly offer low cost workplace ISA savings products to employees.
This variety of companies serving different aspects of workplace financial wellbeing highlights the need to select the right partners and products for your employees.
Specialist employee benefit consultants can help to ensure a targeted and appropriate financial education plan is delivered. Knowing your employees will assist tremendously in this respect: their age, demographic, background and lifestyle needs will help you design a useful financial education programme.
Understanding and reviewing the benefits you offer the staff may also enable you to target them to the right groups of employees. Do your staff understand the pension scheme?
Do you provide other support and protection such as corporate ISAs, Group Life, Income Protection, Private Medical etc? These may all need to be re-evaluated and re-presented to your staff.
Communication and education concerning pensions can be greatly improved by looking across a member’s total pension entitlements including the State Pension. Projecting pension outcomes in a traffic light system such as that adopted by the Pensions and Savings Lifetime Association (PSLA) can also be a simple way of representing a complex issue.
They use a retirement income model with target levels corresponding to Minimum, Modest or Comfortable retirement standards. Reflecting the pension in such a way hopefully increases understanding and engagement.
Employers also need to consider what they want their financial education programme to achieve, what changes need to be made and how the success of the programme will be measured.
It is important for it not to be seen as a one-off task but as a continuous process of support and care for your staff. A successful financial education programme can have some great benefits such as a more targeted and valued employee benefits offering, better understanding the benefits and pension schemes and ultimately less financial stress and worry.
Which is good news for everyone – festivalgoers included.