British American Tobacco (BAT) offers financial education to those employees participating in its share schemes who are based at its London headquarters.
Particular emphasis was placed on the sharesave scheme when it matured in 2006, as the share price had significantly increased in value. The HR department recognised that it needed to ensure that employees were well informed about any potential liability to pay capital gains tax and how they could maximise their allowance. BAT had in the past run financial education seminars in-house, but these had been poorly attended, so this time it enlisted the help of an external consultant.
All employees whose schemes were maturing were invited to attend a seminar. HR project manager Nina Crossen was impressed with the result as half of those invited attended. Employees who had further queries could also attend a free one-to-one clinic with the external consultant. However, if after that staff required specific financial advice, BAT would arrange it, but the employee would pay.
Employee response to the seminars was enthusiastic and many said that they would recommend the seminar to a colleague. As a result, BAT has expanded its education course to cover topics including general financial awareness and retirement planning.
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CASE STUDY: Cushman & Wakeman
Real estate consultancy, Cushman & Wakeman, took steps to offer financial education to its 850 UK staff as many of them were failing to take up the matched-contributions pension or were simply opting for the default investment choices. Ben Marks, associate director, human resources, says: “Sometimes people just opted out of the pension because they didn’t know enough about it.”
The company has now taken advantage of the government’s £150 per head tax-free allowance for financial education on pensions and is offering it to employees with the help of an external consultant. Existing employees can buy up to £150-worth of financial education or advice as part of their flex package. It is highly tax efficient as the fee is paid out of gross pay and there is no tax or national insurance.
The firm has also implemented the scheme for all new starters, who are given the service free. It has to be used within the first two or three months of their arrival. The firm recruits around 150 new people a year and the aim is to get them engaged with benefits immediately.