Companies are electing to engage their own staff with financial awareness rather than turning to government-provided education
As the pensions industry reviews the first year since the pension reforms were implemented, it seems that government-provided financial education is experiencing a dip in popularity.
Only 16% of employers are currently referring staff to Pension Wise – the government’s free guidance service – compared to 20% in October 2015, according to the Close Brothers Business Barometer.
The research showed that instead, employers are seeking to offer their own educative solutions to their workforce.
Six months ago, a quarter (25%) of employers said that the reforms were being used as a stepping stone to engaging all staff with their pensions – a figure that has now increased to 30%.
Retirement seminars for employees are proving increasingly popular: 8% of employers implemented seminars last July – and 14% are currently using them to help staff understand their financial choices and decisions.
Meanwhile, over a third (36%) of employers are giving employees access to financial advice to help them through retirement.
Jeanette Makings, head of financial education at Close Brothers Asset Management, says: “Employers are clearly taking the initiative with more arranging bespoke guidance for their people rather than using Pension Wise. This is not really surprising as employers will not only want the guidance to cover their own pensions and benefits, but they will also want the support to reflect their own values and their particular people culture.
“It is encouraging to see more employers are already increasing their support for staff, engaging them with the pension reforms and providing dedicated retirement seminars. But there is still more that can be done. Employers play a central role in staff wellbeing, and ensuring staff are well informed about how to make the most of their workplace benefits, including pension decisions, is essential for staff retention and protecting the business bottom line.”
Pension Wise, the Money Advise Service and the Pensions Advisory Service are due to be replaced by a ‘slimmed down’ money guidance body – indicating that employees will need to find more robust and comprehensive sources of education and advice, and may well look to their employers for this.
WEALTH at work is blogging about the key areas of employer consideration when helping employees through retirement in Reward's financial education hub.
The hub examines the changes in pensions and looks at how you can help your employees with financial education across all their savings. CLICK HERE to access the hub
For further information about WEALTH at work, please CLICK HERE