Three-quarters (73%) of respondents said their employer offers them no form of financial support or advice, according to research by the Chartered Institute of Personnel and Development (CIPD).
The CIPD’s Summer 2012 employee outlook focus, which surveyed 2,000 UK employees, found that 59% of respondents reported that, among respondents who said that they were offered advice or support, the most common offerings were: employee assistance programmes (13%), access to an independent financial adviser (IFA) (7%), workshops on financial self-management (4%), online financial guidance (3%), access to a credit union (3%), and access to hardship loans (2%).
The research also found:
- 53% of respondents said they are concerned about their financial plans for retirement.
- 20% of respondents from the private sector said they have no financial plans for retirement.
- 39% of respondents said they are concerned about just about making ends meet, rising to 43% among women.
- 27% of respondents said they are concerned that they are not saving enough.
The CIPD has also launched a guide on workplace financial education, which highlights the risks of a financially ill-educated workforce.
Charles Cotton, reward adviser at the CIPD, said: “Employers may think that the financial savvyness of their employees is not their responsibility, but the impact of not providing financial education can mean a workforce pre-occupied or overwhelmed by their own financial worries, and unable to appreciate the value of their organisation’s pay, benefits and pensions package.
“A little financial education can go a long way. It can improve performance by giving employees the means to alleviate stress and pressure they’re under because of financial difficulties.
“It can help boost motivation and staff retention by helping employers to get across the value of the financial benefits they offer to their employees.
“And, by heightening general financial awareness, it can create a workforce that better appreciates the business pressures faced by their employers.”
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While support and advice in the workplace is welcome, the only long-term solution to this problem is high-quality financial education for young people, to ensure that the next generation of employees enter the workplace with the skills and knowledge to better understand and manage their finances.
It is particularly alarming that more than a quarter of employees told the CIPD they felt they were not saving enough for the future. Financial education will be critical in addressing this problem, and is key to encouraging a savings culture from an early age.
This is a very interesting topic. Following Employee Benefits article regarding financial education at work a few months back, we decided to run retirement planning workshops in June.
While there are a small handful of employees who are on top of pension plans and fully aware of how the scheme works, the majority of individuals found the sessions very useful.
Over the past 12 months, we have consciously pushed for people to think about their retirement plans, and the partners are keen to ensure that everyone saves for the future. Offering 10% employer pension contribution is a big incentive to encourage our employees to invest 5% of their salary into their pension scheme. And, for those who save through salary sacrifice, there are futher incentives.
We are pleased to see that our pension enrolment is up from last year, and hope that by combining financial education at work with an online pension portal will ensure that, as an employer, we are helping our employees save for a comfortable and long retirement.
Having rolled out one set of financial education workshops, it is very important to make sure that employers target the workshops to the differing groups of individuals in the workplace so that it hits the right mark and has the right impact.