Are your employees financially savvy? They probably don't need to understand the ins and outs of the stock market - but it makes sense for people to have a good understanding of financial matters that affect their daily lives, and how they can improve their retirement prospects.
And with CIPD research showing that financial concerns can affect an employee's mental and physical health and work performance, it makes good business sense for employers to provide financial education as part of an employee benefits package.
In a recent survey of 2,002 employees, just 15% said that their employer offers a very good level of financial wellbeing support, while around one in three (30%) said their employer offers no support in this area. A further one in six (16%) do not know what support (if any) is available.
The research was conducted by YouGov for Aon's new report, 'Keeping on track in challenging times - DC pension and financial wellbeing employee research 2021'.
Looking at employees' pension expectations, the survey found that the majority (87%) of employees with a defined contribution (DC) pension are expecting a shortfall in retirement income based on current provision.
Over one third (36%) expect to continue in work past the age of 68, and just 37% believe they are currently saving enough for their long-term needs.
Retirement is no longer seen as a one-off event at a specific age, but something that happens in phases and at ever older ages - and this presents new challenges, said Ben Roe, senior partner and head of DC at Aon.
"For many defined contribution pension savers, accessing these savings is likely to be the single biggest financial risk they face," Roe explained. "One bad decision could wipe out many years of careful saving and even a slightly sub-optimal choice could cost thousands over the duration of their retirement.
"All this highlights that employers need to do more to support employees by helping them to save for the future during their active years, enabling them to build adequate pension pots, and helping them to decide how to manage savings when they reach retirement age."
The survey also found that 71% of employees have not set a goal for how much money they will need to save before they fully retire, with this figure even higher for women (76%) and those in their early career (79% for under 35s).
"The most straightforward way for employees to improve their pension outcomes is to save more, and to start as early as possible," said Steven Leigh, principal consultant at Aon. "But it's clear that people are anchored to their employer default or maximum matching contribution levels when choosing how much to save.
"Members expect guidance in simple terms, rather than complex modelling. Quite simply, they want to know how much to save to be able to retire on an adequate income. It's therefore crucial for employers to up their game, to offer better support in a more digestible way and to help employees plan for retirement."