Did you know that The Money Advice Service recently found that more than 16 million people in the UK have less than £100 in savings? Which is staggering considering that the general advice is to have at least 6 months money saved for the unexpected, what most of us have come to know as ‘saving for a rainy day’. So, if employees don’t even have their ‘rainy days’ covered, what are the implications for their financial wellbeing and how will they ever turn their financial dreams into a reality, whether it’s saving for their children’s education or buying that holiday home in the Italian Alps.
Education is key …
With individual financial advice often expensive and therefore prohibitive for many, you as an employer have a perfect opportunity to support and educate your employees, and be instrumental in helping them achieve their longer term financial goals. In fact, research shows that 49% of staff feel that their workplaces should do more to make them better informed about their finances (Source: City AM), while two-thirds of 18–24-year-olds value savings as part of their overall financial wellbeing (Source: YouGov).
Savings allow you to make choices about your future: where you go on holiday, where you live and when you retire. Even if you’re not saving for anything specific, having the freedom to choose can enhance your overall wellbeing. An incredible 78% of employees believe that having a savings nest egg would help with their everyday stress levels (Source: YouGov for Unum), and this is where financial education can help employees understand how to make informed decisions when it comes to managing their money.
Ben Hollingdale of Smarterly, our new workplace savings partner, says, “Financial literacy is a major problem and providing financial education programmes, especially to our younger workforce, should be a primary objective. Education can be delivered both online and during face to face seminars, making it easier to address all employees in an increasingly changing work environment. As well as helping to educate, we can make doing the right thing easier for our workforce, by including financial wellbeing products in our benefits packages to support employees at all stages of their financial journey."
Make investing easy …
With low interest rates on typical high street cash savings accounts, choosing the best place to invest your money can be daunting and confusing. So, one way to help employees in achieving their savings goals is to provide workplace ISAs that can be funded through employee net pay, to help support better savings habits and reduce the risk of spending before you save. With Smarterly, workplace ISAs are available from just £10 per month or a £100 lump sum. Employees don’t have to be investment experts – Smarterly offers readymade portfolios and access to simple, impartial comparison tables covering over 90 top-rated investment providers, and automatic monitoring after employees invest.
Some innovative employers even allow pension funding to be directed into alternative savings products such as ISAs to help employees achieve goals like buying their first house. This re-direction of pension budget receives greater recognition, appreciation and engagement with employees.
Get into a savings habit ...
Neil Bowen, Business Development Director at You at Work says, “One of the reasons we have teamed up with Smarterly is to offer a simpler way for employees to take control of their future. When I started working - more years ago than I care to remember! - British Rail provided ‘The Railway Savings Bank’ which most people joined as a new starter. As a young person the money was deducted before I got paid and I just didn’t think about it. When BR closed the bank during privatisation, there was a tidy sum that I’d all but forgotten about, but it helped me buy my first property. Smarterly bring a newer and far more exciting spin into workplace savings and I believe saving before you get paid is a fantastic habit to get into. Personally I believe it to be one of the most exciting benefits in many years."
To have a conversation about how to help turn your employees long term financial dreams into a reality and introduce a range of benefits to support financial wellbeing in the workplace we’d love to talk to you now.