Jelf Says Employers Put Money For Financial Education

With the radical changes to pensions nearly upon us, research* from Jelf Employee Benefits highlights that the overwhelming majority of employers (96%) think that this new flexibility creates a need for more financial education in the workplace. The research also found that employers are happy to put their money where their mouth is as over 73% believe this should be employer funded.

Jo Thresher, head of money at work said: “Typically only a small percentage of employees have been educated in financial matters in the past and yet a lot of employer communications assume a certain level of knowledge about pensions, protection and other products. Offering financial education means that employees will be better placed to understand the messages employers are trying to convey and therefore more likely to engage.”

The research found that over half (52%) of organisations thought that financial education should be entirely employer funded with a further 21% believing it should be funded on a case-by-case basis. However Jelf would urge employers to consider educating their entire workforce, not only because studies suggest that worrying about finances can detrimentally affect concentration** and lead to absence but on a more positive note, staff will be more loyal and committed.

Thresher continued: “We don’t agree with the sentiment that financial education should be funded on a case-by-case basis, however we would advocate that the content and delivery should be appropriate to the individual to ensure a successful outcome for both the employer and employee. Today’s junior member of staff may be on tomorrow’s management team and therefore excluding some staff from financial education doesn’t make sense in the long term. And if someone is further up the pay scale, it’s easy to assume that they are better at managing their finances but that is not necessarily the case.”

Offering financial education is also a door opener to help fine tune an organisation’s benefits package as a whole. The employer is better able to keep track of which areas employees value most and then invest money where it is most appreciated or where it can make a marked difference to the business (such as in improving absence management).

Thresher concluded: “Offering benefits without financial education is akin to giving someone a tool but no handbook – many people may be able to muddle through but the most successful outcomes will be where staff have clear guidance.”