Pension freedoms drive financial education

Financial education in the workplace is increasingly becoming a part of the employee benefits landscape in the UK. There have been many drivers behind the rise and rise of this benefit option, but perhaps the pivotal moment came with the announcement of pension freedoms in 2014.

Fundamentally, pension freedoms was a game changer for retirement savings, allowing savers to access their retirement savings in a variety of formats and possibly even before actual retirement from the workplace. This was such a fundamental change from the previously available retirement options (which for many amounted to using the lion’s share of their savings for purchase an annuity only) that the more savvy and caring employers recognised that providing greater education, guidance, and advice around the use of retirement savings should become the norm. As a result, many more employers are now offering a range of financial education courses and tools for older workers.

Yet financial education should not stop there. It is generally accepted that employees of all ages and salary grades could also benefit hugely, and increasingly employers are now looking to see how basic education tools can be extended to these other demographics within their workforce.

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This takes us nicely to some recent work that Katie Vye of Jelf Employee Benefits has undertaken with our client Hachette. As you will see from this exclusive article in Employee Benefits magazine, the focus of the training was a group of employees aged below 30, and it’s fair to say that the results of this work are hugely encouraging. Not only did this exercise help these employees understand and manage their finances better, it also provided an immediate return on investment to the sponsoring employer (78% of respondents felt more positive towards their employer as a result of utilising this benefit).

This is clear evidence that financial education services can and should be extended to more employee demographics over the coming years.