Most employers (63%) believe that they should be looking after their staff’s financial wellbeing, according to new research from Aon, the British global professional services company that provides risk, retirement and health consulting. However, Aon found that many business’s financial communications to staff need a serious health check.
Its Benefits and Trends Survey 2019 found that email (78%) and printed communications (63%) are still the two most popular communications methods for educating and engaging with employees about their pension and other financial matters.
However it also discovered that almost half (48%) of businesses didn’t know what information and services they provide for pension scheme members, to explain their retirement choices!
What does it mean for business?
While email and print information are both straightforward, everyday ways of communicating, neither encourages employees to ask questions, open up a dialogue about their options, or get help with information that they don’t understand. It’s all too easy to file printed brochures away, or simply skip past an email.
That could mean employees make poor retirement decisions, based on limited information. According to the Financial Conduct Authority, around a third of people who put their pension savings into drawdown do so without seeking any advice. It also found that around one in three people in drawdown didn’t know how their money is invested, and that many providers are ‘defaulting’ consumers into cash assets. That means that they are losing out the potential for investment growth which will sustain their pension savings for longer.
Helping employees with decision-making in the run up to retirement could mean the difference between someone’s savings lasting a lifetime and them running out of money in years to come. There are some great online sources of information, such as Pension Wise (www.pensionwise.co.uk – soon to become part of the Money and Pensions Service) which can help provide a more interactive approach to financial information to supplement email and paper.
However, personalised, face-to-face, qualified financial advice is invaluable in the run up to retirement and beyond. This can help employees understand the options on offer to them and choose an appropriate product for their own needs.
At Brunsdon we specialise in employee benefits communication and workplace financial education. If you need help to design a financial / employee benefits / pre-retirement workplace communications strategy, please talk to your Brunsdon Financial Adviser.