What does an effective financial education strategy look like?

The new pension reforms are driving employers to consider how best to introduce workplace financial education, but where should they start and what does an effective strategy look like?

teaching financial

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  • Employers must identify employees’ financial concerns.
  • Financial education strategies should be based on employers’ existing benefits.
  • Strategies must be ongoing to maintain their impact.

The abolition of compulsory annuitisation for defined contribution (DC) pension scheme members could be challenging for employers that do not have any established financial education programmes to provide the support and guidance around retirement options that many of their employees need.

Thankfully, workplace financial education strategies are relatively straightforward to create and implement, as long as employers get the constituent parts right.

Identify staff needs

First, employers need to identify what type of financial education their employees need and want.

Jo Thresher, head of money at work at benefits consultancy Jelf Employee Benefits, advises employers to use focus groups to identify employees’ requirements, but groups must be limited in number and restricted to staff of the same grade to encourage participation.

“Younger employees can feel ashamed and get embarrassed about their money issues in front of their managers,” she says.

Managers often feel the same way, which is why segmentation by employee grade is often the best approach for focus groups, says Thresher.

Wider financial concerns are relevant

Employers can further optimise employee participation in focus groups by allowing staff to factor in any financial products and services they may hold outside the workplace, and share any financial concerns about these.

Angus Jones, chief executive officer at independent financial advice provider Clarity, says: “Benefits communication has limited value if an employee cannot place the value of the benefits in the context of their total wealth position.

“Employees who are responsible for other family members, not just their own partners and children, but increasingly parents and maybe other family members who need help, need to be able to take benefits and place them in the context of their total (financial) plan. The employer’s plan is just one important element, but it is not the whole picture.”

Jonathan Watts-Lay, a director at financial education provider Wealth at Work, adds: “An employer’s financial education strategy might be focusing on the tax advantages of the transfer of shares into an Isa [individual savings account]. But it could be that an employee does not have a workplace Isa, and it could even be that the rules of their employer’s pension scheme do not allow shares to be transferred into that workplace pension.

“But we may still be required to talk about that, despite employees not being able to execute anything around it.”

Money worries effects

Benefits selection is key

Financial education strategies should be largely based on employers’ existing benefits and workplace savings products , rather than being shoe-horned into an organisation.

Employers’ pension schemes, share plans, share options, long-term incentive plans (L-tips), Isas and at-retirement programmes all sit perfectly within a workplace financial education strategy.

Employers may also include wider lifestyle issues, such as health and wellbeing management, for employees approaching retirement.

Delivery methods will differ

Delivery methods for financial education strategies range from email campaigns and posters on office toilet doors to workplace seminars.

Employers must recognise that different employees require different methods of information delivery, says Jeanette Makings, director, financial education services at Close Brothers. “For some staff, a face-to-face seminar will deliver the best outcome, while for others, employers might need to offer a webinar,” she says.

Webinars are particularly useful for expatriate staff working around the globe, while face-to-face seminars deliver the best outcomes where complex financial information is involved.

Share options, L-tips, pension scheme annual allowances and lifetime limits are topics that are particularly well suited to face-to-face, and often one-to-one, delivery methods, says Clarity’s Jones.

Workplace online calculators and planners can also support employers’ efforts by enabling staff to model their own finances and forecast their retirement outcomes based on their current financial status.

Messaging must be engaging 

The messaging around and within a financial education strategy must be engaging. Employers could decide to focus this around employees’ ages or life events such as marriage, the birth of a child or retirement.

An employee’s tax status can also be a useful communications hook, says Wealth at Work’s Watts-Lay.

“We might use a message that says ‘Don’t pay more tax than you have to’, which will engage employees,” he says.  

Generic messaging can also be effective, says Jelf’s Thresher. “What we have found works is a simple, generic invite that asks all staff: ‘Do you want to be better with money’? Staff that do will engage,” she says.

Employers should consider a rolling programme over about three years to sustain the impact of their financial education strategy, she adds. 

Three-year plan

“Employers cannot get an employee who is struggling with money and debt and not budgeting very well to deal with their pension,” she says. “They have got to take steps along the way, so employers need to work out a three-year plan and identify who they plan to tackle and when they plan to revisit them. Then I think they will get real success.”

Clarity’s Jones adds: “It should be a long-term strategy rather than a one-off event, designed to educate and empower employees over time and change behaviour.” 

Most employers consider financial education as part of their duty of care for staff and, accordingly, fund their strategies. However, some organisations require employees to fund independent financial advice , which is often offered through a flexible benefits plan, for example. 

But whatever the content of a financial education strategy, and however it is funded, it must be based on clear objectives.

Close Brothers’ Makings says: “Employers need to understand what they are trying to achieve and then understand which part of their staff demographics it is targeted at and whether it is all staff or specific groups. Employers need to focus on understanding the segmentation required within these groups, how best to get to those employees, and what they will respond to best.”

Case study: Victrex rolls out financial education programme for all staff 


Polymer manufacturer Victrex launched a financial education programme in the summer of 2014 with the aim of engaging staff in the value of its benefits package, particularly its pension scheme.

With the help of financial education provider Wealth at Work, the organisation introduced workplace financial education seminars for its three sites in Middlesbrough, Rotherham and Thornton Cleveleys, Lancashire, with content segmented into three categories based on employee age.

Sally Knill, head of reward at Victrex, says: “The idea of breaking the employee population into groups so that we could target information was key.”

Group one comprised employees aged up to 32, group two those aged 32 to 47, while staff in group three were aged 47 and above.

Topics ranged from mortgages and student loans for group one to long-term financial planning for group two and retirement options for group three. The seminars also included advice on how to spot and avoid financial scams.

Seminars were held during each site’s off-site, one-day away days. Staff were emailed in advance about which seminar they were scheduled to attend. 

Following the seminars, the number of employees that have asked to pay additional voluntary contributions into the organisation’s trust-based defined contribution pension scheme has increased from two or three a year to 17 in three months, demonstrating the effectiveness of the strategy, says Knill.

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The fact that the seminars were delivered by an independent provider boosted the programme’s effectiveness, she says.

The programme, which has cost Victrex just over £25,000 to develop and implement, will be fully rolled out every three years to support employees’ changing financial needs and aspirations as they progress to the next age group.