How to use pensions and share plans as a catalyst for financial wellbeing

While that might be the dream scenario, in practice for many businesses, the first step is borne out of a specific need or set of circumstance – such as supporting employees who are uncertain about their retirement options, or absence due to money worries. But that can quickly broaden out as employees start to ask about other ways their employer can help them.

This was the topic of a panel debate on financial wellbeing which I enjoyed taking part in earlier this week. My fellow panellists were two employers and two industry experts. The employers were from the financial services and oil and gas sectors, and both had started investigating financial education to help employees make the most of income from employee share schemes at the end of a vesting period.

However, in both cases, their strategy quickly moved on as it became apparent employees had education and financial wellbeing needs that spread far beyond navigating the tax advantages and future wealth potential of share plans.

Although both companies were from traditional high-earning sectors, they soon discovered that employees were struggling with building financial safety nets and planning their future savings needs. Understanding pension options and the implications of the Lifetime Allowance and Annual Allowance taper was another key area where employees badly needed help.

From a starting point of helping employees with share plans, their strategies had evolved to include running financial wellbeing events, and opportunities for employees to book 30-minute one-to-one sessions with an adviser to talk about any financial worries.

The three most significant learnings from the day were:

1. Starting with a specific project or addressing a known problem is a proven starting point for a financial wellbeing strategy. It can then be broadened as employees’ needs become clearer.
2. Don’t assume a ‘high-earning’ workforce doesn’t need financial wellbeing – they may still be struggling and worrying about money (and may feel under pressure not to talk at work about it, particularly in a financial services company).
3. Financial education and wellbeing can’t start early enough. The day’s keynote speaker, Rob Gardner, who set up the financial education charity REDStart, emphasised the importance of helping school-age children become more aware of how to manage their money and save effectively. Questions from the audience showed that many younger workers are starting work unsure where to begin with managing their salary and saving for the future. For some employers, supporting first-time workers could be the best starting point for financial wellbeing.

Maggie Williams, content director at REBA, was speaking at AAG’s Financial Education workshop.