By Daniel Hunter
A third of employers have seen an increase in younger staff seeking advice on their pension, according to the latest research from Close Brothers Asset Management.
In the wake of the new pension legislation, 33% have seen more staff coming forward to ask for help on their future saving plans well before retirement age. Of these, more than half have seen a significant increase.
The reforms are also having an impact on companies’ approaches to financial education. Close Brothers Asset Management’s latest Business Barometer survey, which questioned nearly 700 employers, found that the pension reforms have encouraged almost 37% of employers to play a greater role in financially educating employees.
While 10% are confident they already had robust enough programmes in place, a further 14% are directing staff towards external resources like financial advisers or Pensions Wise.
When it comes to implementing financial education, employers are actively engaging more with their staff, with a particular focus on planning for retirement. Two fifths (42%) of employers are now planning more pension engagement exercises with their employees to encourage them to save for their future. Of these, just 12% are limiting this to employees aged over 55.
On a regional level, employers in the South East have seen the greatest increase in demand from younger staff for advice on their pension (44%). By contrast, just 20% of employers in Yorkshire and the Humber have reported an increase in demand.
Jeanette Makings, head of financial education services at Close Brothers, said: “This is better news than could have been hoped for. Already, just three months in, the pension reforms are not just encouraging those approaching retirement to think about their financial plans, but they are also turning the heads of the younger generation. And just as encouraging is that a growing number of employers have identified the change as an opportunity to introduce or revisit their approach to financial education to support all staff in improving financial wellbeing and planning for retirement.
“It is important for employers to remember the pivotal role they can play in the education of staff throughout their careers: retirement planning doesn’t just happen at retirement and the earlier people start using their workplace pensions and other benefits to improve their financial wellbeing, the better. The research is clear that while many have already taken positive steps, there is more that can be done.
“Employee financial wellbeing doesn’t just benefit individuals, it is crucial to business success, boosting engagement, retention and productivity.”