• 93% of companies believe recent changes affecting benefits increase the need for financial education

• 91% of companies believe staff are unaware of financial implications of changes to benefits

• Yet 40% don’t offer any financial education support

With the myriad recent legislative changes to employee benefits, particularly pensions, the vast majority (93%) of employers believe this increases the need for financial education for staff, findings in the Jelf Employee Benefits 2015/2016 survey shows. This is brought into sharp focus by the fact that 91% don’t believe their employees are aware of the financial impact of changes on their benefits. Yet 40% of employers don’t offer their staff any assistance with financial education.

Jelf welcomed the announcement in 2014 that financial education would now finally be a part of the national school curriculum, but believes this is small comfort to those affected by changes in legislation right now.

The employee benefits company points out that it is vitally important for staff to understand the implications of changes and what it means to them personally. The extensive media coverage of Pensions Freedom has been very good for getting pensions front of mind, but the changes leave important questions unanswered for many. Given that decisions taken have the potential to affect someone’s life throughout their retirement it’s imperative that any decisions taken are informed.

Jelf predicts that financial education in the workplace will become the cornerstone of future benefit packages, adding real value to all benefits that are offered.

Jo Thresher, head of money at work at Jelf Employee Benefits says:

“Employers invest a great deal, in both time and money, choosing appropriate benefits for their company. This is effectively wasted if the benefits aren’t communicated. Financial education plays a key part in bringing employee benefits to life for staff and engages them to take more personal responsibility.”

While employers believe that there is a need for more financial education, many (40%) don’t offer any at all, including 5% who believe it isn’t their responsibility. Relatively small numbers offer onsite workshops and support (6%), and 37% offer limited support on a case-by-case basis. Jelf Employee Benefits believe that not only could companies do more, they’d reap the benefits themselves if they did.

Jo Thresher continues,

“Money worries are severely detrimental to a person’s wellbeing and can permeate every area of their life, including, of course, their work. Productivity can be much lower for people with money worries, so it makes economic sense for employers to offer assistance where they can.”

For financial education to be most effective, the company recommends that it focuses on the needs of the employee and not just on the employee benefits offered, taking into account their earnings, life-stage, family status, etc. Best-practice financial education also goes much further, looking at implications for the wider life of the employee, such as building a life post retirement. The most effective communications encapsulate a mix of methods including online, digital, competitions, one-to-ones, workshops and presentations to bring the topic alive and engage staff.

As Lee Coles, head of laterlife concludes:

“Recognising the need for financial education is the first step, so we’re pleased to see this acknowledged by so many. The next step is to act, and there are many benefits in this happening sooner rather than later, education is essential an every stage of employees’ careers. There is a great deal of support available for employers now and we urge them to speak to the experts.”

The above figures were part of the wider 2015/16 Jelf Employee Benefits Survey which includes employer views on many aspects of employee benefit provision and can be viewed here.

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