What is a mid-life MOT and should you offer it to your employees?
Findings from a Wealth Wizards research report in 2018 found that 86 per cent of employees want to retire at or before 65, but only 37 per cent believed this to be financially feasible. Additionally, 20 per cent believed they will never be able to retire due to poor financial planning.
Many people are simply not saving enough and with an estimated 12 million people heading towards an insufficient retirement income it is important that steps are taken to ensure that working later in life remains a choice, not a necessity. Mid-life can mark the start of a steady increase in the prevalence of long-term health conditions and this must be taken in to consideration by individuals but also by employers.
All of this suggests that people in mid-life may need more support to plan and prepare for their later lives and both the employer and the employee can benefit from this.
What is a ‘mid-life MOT’?
As we live and work for much longer than ever before, many people now have more options and choices when it comes to their futures. Yet there is relatively little help for the majority in making those choices. Financial advice is an essential part of the retirement process however, historically financial advice has been reserved for those with ample savings and high earners. Support for those with less than £200,000 is patchy; many miss out some important aspects of planning for later life and often they only reach out for advice at the point of retirement – when it is too late to make a real difference.
The idea of a mid-life financial MOT could provide employees with timely, holistic information, advice and guidance to prepare for later life. It might cover areas such as health, career, finance, and managing major life changes, and could even expand into looking at other sources of wealth and assets that employees have access to and consider how these could support them in retirement.
Recommended in the Cridland Review of the State Pension age, the idea is that this service would help people better understand their financial situation and options for the future, at a time when they can still take action and make a difference.
With the success of automatic enrolment, many people are now turning to their employers for information and guidance on their pension, so it’s a natural next step for employers to offer a broader service that would be a valuable employee-benefit.
What can you do next?
Before you do anything, it’s crucial to listen to the needs of your workforce. It’s almost impossible to know the status of their financial wellbeing, regardless of their age, without getting their input. There are so many other factors to take in to consideration, and you may be surprised to find out what it is they really need help with.
Last year, the Centre for Ageing Better published a report looking at the mid-life MOTs being trialled by Aviva, Legal & General, Mercer and The Pensions Advisory Service, to provide advice to other employers considering offering this service. The report highlighted that age is not a fixed concept – and we all know that age is just a number – and that employers should think carefully about who they want to target through a mid-life MOT. Another key piece of advice from the report was that employers considering a financial MOT should implement a service that allows them to adapt it depending on the employee’s needs. For example, some people will prefer telephone consultations, while others would prefer face-to-face sessions. Others may want to use online tools to do it in their own time, whereas others may prefer a group session during their working day to fit it in.
At Wealth Wizards, we have experienced first hand the different ways people want to engage with financial advice with some customers wanting to do everything online, while some would prefer to have a phone call as an initial chat. We have also seen a rise in the number of people wanting to use online tools, such as our Money Wizard, so we wholeheartedly believe in offering a range of different ‘touchpoints’ for employees.
Overall, it’s important to remember that this shouldn’t just be a tick-box exercise or a one-off service from an employer. In order to ensure the best outcomes, employees will need to be given practical, actionable takeaways and there must be access to further information for those that need it.
Where can I find out more?
If you are considering introducing a mid-life MOT, we would recommend listening to, and understanding the varying needs of your employees first and foremost.
You may also want to consider speaking to an external provider that can offer expert financial guidance and advice to your employees.
Whether you decide to go down the route of a mid-life financial MOT or not, it’s undeniable that people across the UK need more support with their retirement planning and employers are ideally placed to play a key role in this.
This article is provided by Wealth Wizards.
References
- https://www.independent.co.uk/news/business/news/retirement-state-pensions-1-million-fca-boss-saving-living-standards-financial-conduct-authority-a8006446.html
-
https://www.wealthwizards.com/blog/the-wealth-wizards-working-late-report/
-
Fuller Working Lives: a framework for action, 2014
-
Developing the Mid-Life MOT, Centre for Ageing Better, 25 September 2018
In partnership with Wealth Wizards Ltd
We are a technology company making expert financial advice accessible and affordable to everyone.
