The majority (60%) of employees want help to make the right pension and savings decisions, according to research by LifeSight.
Despite this, LifeSight found that more than three quarters (77%) of employers do not currently have any plans to play a greater role in the long-term savings of their workforce, even though over a third of organisations (38%) believe that employees are prioritising saving for a holiday or house over saving into a pension.
Jonathan Watts-Lay, Director, WEALTH at work, a leading provider of financial education, guidance and advice in the workplace, comments; “Learning how to manage money is an important life skill and getting the balance right between spending and saving is fundamental. However, many employees struggle to understand various financial issues that may relate to them and require help and support in order to feel secure when it comes to their finances.
Financial education delivered in the workplace can help individuals understand the basic principles of money management, including how to set budgets and manage finances, and how to build a personal savings plan – all in order to support short, medium and long-term saving goals; whether that is saving for a first home, holiday or to generate income at-retirement.
However, employers rarely possess the resources or skills sets that they need to be able to offer this support internally, hence the need for specialist financial education services provided by companies such as WEALTH at work.”
Watts-Lay continues; “With any financial education programme, it’s crucial to understand the hugely varying needs of a workforce; from younger employees facing the challenge of trying to make their earnings stretch further, to individuals facing retirement and grappling with how best to access their pension pots, or even how to address challenges such as debt management and affordability.
After all, affordability is a particularly pressing issue in light of Hymans Robertson research, which suggests that some savers will have to save up to 22% of their wages over a lifetime to ensure they have an adequate income in retirement – a far cry from the 10% currently being paid in. Furthermore, many individuals face the likelihood of having to push their retirement back to their 70s to make up a shortfall in their pension pot, according to the research.”
Watts-Lay concludes; “Employers have a duty to support the financial wellbeing of all employees, whatever their savings goals, through the provision of a comprehensive financial education programme that empowers individuals to evaluate their current financial position, identify potential savings, set realistic savings goals in-line with their short, medium and long-term priorities, while effectively managing risk and optimising tax efficiencies throughout the process.”