Older employees less likely to use workplace financial guidance

12 Oct 2020
Senior man and colleagues sit around a desk

Whatever life stage your employees are at, financial education can help them make the most of their money now and in the future. But new research shows that take-up of financial education in the workplace varies greatly across the generations.

The 'Changing Trends of Financial Wellbeing' report from Close Brothers found that millennials (aged 25-35) are nearly five times as likely to take advantage of the financial advice or guidance on offer through their workplace compared with those approaching retirement (38% vs 8%). In fact, around two thirds of this older cohort explicitly stated that they were unlikely to use it.

The findings underline the importance of employers addressing imbalances between the generations as they develop financial education programmes as part of their employee benefits offering.

Overall, around one in five (21%) UK workers said that they would turn to their employers for financial advice or guidance, highlighting that a disconnect remains between employees and employers when it comes to financial wellbeing, Close Brothers noted.

Yet, of those employees that receive financial advice or guidance from their employer, 80% say that they trust it, with just 20% saying they don't.

The most popular source of information on financial matters is personal finance websites, e.g. Money Saving Expert, with 50% of UK workers turning to these sites. Others would turn to a family member or friend (30%), their bank or financial provider (30%), or to a government organisation like Pension Wise (28%).

Meanwhile, a quarter (25%) would take guidance from an independent financial adviser and a similar number (24%) would rely on the media (e.g. newspapers, radio and TV).

When asked to identify the top five things that would help improve their savings habits, one in ten (10%) employees identified workplace financial education, 10% face-to-face financial advice and 7% online financial advice. But for those approaching retirement, the top three were a higher salary (57%), lower income tax (25%) and more tax incentives for saving (26%).

"Proper provisions for financial wellbeing are integral to unlocking both employee and business performance, as well as attracting and retaining the best talent," commented Jeanette Makings, head of Financial Education at Close Brothers.

"Despite their time of life those approaching retirement are seemingly the hardest to reach, but this may be skewed by the proportion that still have a defined benefit pension to rely on. Nevertheless, with providers and some employer exercises still targeting defined benefit pension transfers, it is essential to ensure employees approaching retirement have access to impartial financial guidance and advice. It's also clear that when designing financial wellbeing programmes, the different generational attitudes need to be taken into account for these programmes to be truly impactful."

She added: "Many workers will now be experiencing hugely increased anxiety surrounding their finances and so they need all the support they can get in such uncertain times. And given the financial challenges presented by Covid-19, businesses cannot afford to be complacent when it comes to financial wellbeing."

At Fidelius we can create employee benefits solutions, including financial education, tailored to you and your employees' needs. We have a variety of methods to help you deliver your strategic HR and business objectives, meaning we can achieve measurable employee engagement and return on your investment across any logistical or geographical challenges. Get in touch today to find out more.