More employers are aiming to help employees tackle the ‘lifetime savings challenge’, says the research from Close Brothers and the Pension and Lifetime Savings Association (PLSA).
While 50% of employers do not currently offer financial education, one in five (20%) says they plan to do so in the next twelve months.
The Lifetime Savings Challenge report, which seeks to understand how employees are saving, found that three in five (60%) employers agree that some of their staff do not have sufficient savings, including pensions.
The report says that this is not only due to them finding saving unaffordable (29%) or having too much debt (21%), it is also due to the savings landscape being too complicated (20%) and workers not understanding the savings choices available (15%).
Of the employers already providing financial education, 30% do so as a way of reducing employee financial stress, 30% do so to improve employee financial wellbeing, 29% believe it is a valued employee benefit, and 28% do so to ensure employees understand and make the most of their workplace benefits.
More than half (55%) of employers who offer financial education do so via group face-to-face sessions, with 49% offering individual face-to-face meetings and 21% offering access to advice over the phone.
According to those who provide financial education, face-to face advice (62%) is the most effective way to increase the understanding of personal saving and engagement among employees. Despite the rise of technology solutions being offered, web based services such as webinars and online education/intranet were only rated as the most effective delivery method by 9% of employers.
Of those employers who have no plans to provide financial education, half (50%) said it was not a priority, 35% say that there is no budget for it, and one fifth (20%) believed that financial education would be too expensive to provide.
Jeanette Makings, head of financial education at Close Brothers, said: “Of those employees that have received financial education, over a third said that it had been useful in guiding their immediate, medium, and long-term saving decisions. This means a happier, more secure and more productive workforce.”
Nigel Peaple, deputy director of DC, Lifetime Savings and Research at the PLSA said: “When you consider salaries, pension contributions and other benefits, UK employers make a significant contribution to their employees’ financial wellbeing. Financial literacy has long been an issue that the UK has struggled with so it is good news that an increasing number of employers are realising the important role they can play in helping employees tackle the lifetime savings challenge.
“Looking to the future, providers, schemes and government also have a role to play in helping people to make the most of their finances. The PLSA is currently consulting on the creation of a set of retirement income targets which will provide savers with tangible goals to take into account as they plan their finances.”
The data is based on surveys conducted among 1,000 employers with 200 or more employees and 2,009 employees from companies with 200 or more employees. The research was carried out by Opinium in August 2017.