Secondsight research highlights employee demand for financial education is not being met. Leading benefits adviser launches its Financial Education Programme, and warns employers of the need to support staff, and remain competitive.
More than half (52 percent) of companies do not provide any financial education to their employees, according to a new HR survey (1). Meanwhile, two thirds (67 percent) of employees in the UK claim they don’t receive financial education from their employer. A higher proportion of older people, in the 55+ age bracket, (77 percent) claimed they had not received any form of financial education. However, half (50 percent) of HR professionals surveyed said their employees had requested access to financial education in the workplace.
The research was carried out on behalf of employee benefits adviser Secondsight, part of national financial advisers, Foster Denovo. The need for financial education would appear to be urgent as the vast majority of employees have no plan to provide for their future. Less than 20 percent have a solid financial plan in place and only 38 percent have a vague idea about how to manage their money. Most employees also have no idea how much their pension is worth, with only 11 percent knowing how much they will retire on. Less than a quarter of employees (22 percent) have a financial adviser, and 6 percent of people are relying on a friend for financial advice.
The survey also highlighted that nearly three quarters (73 percent) of employees said financial education being offered made them feel more positive about their employer, with 23 percent stating it made them more loyal. This rose to 43 percent for the 16-24 year age bracket. These figures were backed by 51 percent of employers who said that the reason for offering it was to improve engagement. Darren Laverty, director of sales and marketing at Foster Denovo, said: “Clearly, employee demand for financial education is not being met, and companies are failing to support their staff with sound financial and retirement planning.
“Organisations across the UK need to place real emphasis on the need for financial education in the workplace. Providing it can be achieved at a relatively small cost and should be seen as an investment, because the benefits significantly outweigh the costs. It is particularly important to provide financial education for young people, who may be saddled with student debts and struggling to get on the housing ladder. If companies help younger members of staff, they are inclined to be more loyal and stick with them.”
Many employers don’t provide financial education because they think it would cost them too much or because they do not feel it is their responsibility. Some 39 percent believe the service is prohibitively expensive and a similar figure (38 percent) think it is not something they should be providing. “Workplace financial education is very different to providing financial advice. It is about empowering employees to make their own financial decisions with their newfound knowledge. However, some may want a professional to help make their financial planning decisions. For those that don’t have an adviser, but who are provided with financial education, their knowledge will improve and they will no longer be making decisions in the dark.” said Laverty.
More than half (52 percent) of HR professionals think it should be the responsibility of the employer to provide financial education to their staff. Some 31 percent of employees see it as being the responsibility of employers, and 67 percent of employees believe children would be better prepared for adult life if they were taught financial education at school. “We have seen a clear demand for financial education from employees,” said Laverty. “This is an excellent opportunity for employers to engage their staff and reap the benefits.”
The survey provides the backdrop to the launch of the Secondsight Financial Education Programme (FEP). Working with its clients, Secondsight hosts introductory high-level financial awareness programmes for company employees. “The aim is to raise employees’ financial awareness and provide a new perspective on their own financial situation,” said Laverty. “I firmly believe that financial education should be an ongoing employee benefit. And, the onus should be upon the workplace to support its employees towards building stronger and better financial futures.”