How aware are employees – or even employers – of regulatory changes to pensions and the impact these new measures will have on their lives and retirement plans?
We asked employees this question earlier this year and, worryingly, levels of awareness are a lot lower than you might think. Take the new government legislation around ending the default retirement age (DRA) which is being phased in from 6th April and takes full effect from 1st October 2011 with ramifications for both companies and employees approaching 65. Almost half (40%) of the 2,000 employees we asked had no idea or were unsure of how these changes would impact their long term savings plans.
Whenever there is a change to the landscape of the workplace, especially one of this scale, a period of change and adjustment for both employers and employees is an inevitable consequence. Our research suggests that anxious workers increasingly look to their employer for guidance and advice on their finances, with seven in ten people surveyed saying it should be their employer’s responsibility to advise them of any regulatory changes particularly for the long-term, such as retirement planning. A staggering 92% stated they have received no information whatsoever from their employer.
One way of helping employees is to offer targeted financial education and impartial advice in the workplace. Doing this enables employees to learn the rules, understand what options they have and how to apply these to their own situations, and ultimately creates peace of mind for the employer.
If employers are able to provide this support for their employees, this can yield huge benefits in terms of trust and improved employee engagement – thereby helping staff morale and retention rates. In addition financial education also helps to keep their workforce informed and improves their all round understanding of financial issues with obvious business benefits too.
Jeanette Makings, Director - Financial Education Services, Close Brothers
Jeanette joined Close in 2000 and has held a number of roles including heading up our marketing team, prior to her current role leading the team that works with employers to deliver our financial education services.
Against the backdrop of the growing importance that many employers now place around employee engagement, Jeanette has expanded and enhanced our financial education services enabling more employers to access them and so differentiate their employee offering and demonstrate the value they place on developing and supporting their people.
