Should your employer help with your financial education?

Investment / Savings
Early Career
Joe Phelan's picture
Do employers do enough to educate their staff when it comes to monetary matters?

Should your employer help with your financial education?

According to the results of a recent study commissioned by the Open University and Share Radio, almost two thirds (64%) of UK employees claim they have never received any education when it comes to personal finance, with close to half (44%) admitting the last time they gained new financial knowledge was as the result of a major life event, such as buying a property or getting divorced.

The report, published in November 2015, also highlights the argument that there is a severe lack of financial advice on offer in the workplace, despite the vast majority of respondents indicating that they would welcome the opportunity to become more financially astute with the assistance of their employer.

Key findings:

- A substantial 81% would appreciate help from their employer to better understand their finances
- 33% believe they would be better prepared for the future should financial training be provided in the workplace
- More than a quarter – 26% - would like one-to-one sessions with a financial expert
- 25% want financial training so they can better understand their pension
- Only 7%, or 1 in 14, claim to have received any financial support from their current employer

Though these figures indicate that the vast majority of workers would appreciate the opportunity to glean information and direction with regard to their financial health, many employers have traditionally been reluctant to offer such guidance for fear of breaching Financial Services Authority (FSA) regulations. Because only authorised firms and individuals are permitted to offer advice on financial services and products, many employers have taken the decision to shy away from the concept of supplying financial advice entirely.

The results of the Open University survey also appear to suggest that though many people are aware they could benefit from advice when it comes to looking after their money, they are either unaware of how to go about it, or are reluctant to approach an adviser. Finding a reliable adviser need not be complicated or a cause for apprehension; in fact, it’s as simple as visiting the VouchedFor website, typing in your postcode, and selecting the type of advice you require.

We spoke to Sanjay Badhan, a Swindon-based independent financial adviser, to discuss why many employers do not currently have provisions in place to offer their employers financial guidance, to look at ways in which this could be remedied, and to emphasise how valuable obtaining financial advice can be.

“I certainly believe that employers should, one way or another, offer financial assistance to their members of staff. There are, however, obstacles; even if there were a plethora of advisers available, and the advice was considered affordable by all, I personally think the uptake would not be overwhelming. Though research shows people would be interested in financial workshops or training were it offered by their employer, many are reluctant to seek advice on their own.

“Countless individuals simply do not feel they require assistance, and, unfortunately, swathes of people only make the decision to seek financial advice when retirement is looming, and often that is too late for any extensive planning to take place.

“One common scenario involves a person being close to retirement, seeking financial advice, and then finding out that they have insufficient funds to realise the retirement lifestyle they had envisaged. With hindsight it’s clear to see that getting advice ten years ago would have been beneficial, and this is where I feel an employer can make a difference; if advice was available within the workplace, then there’s no doubt more people could be educated.

“There are basic benefits that everyone could achieve with minimal guidance, and these could feasibly be supplied by a junior or trainee adviser. If time was set aside by an employer for a clinic, or a simple teaching session, then certainly some employees would gain a better understanding not only of how to best manage their finances, but also of how bespoke advice could set them up for the future. Such sessions could also go some way to removing the trepidation many people associate with approaching a financial adviser.

“For more complex requirements, an individual could subsequently seek a detailed and structured financial plan courtesy of a more qualified adviser. Though this would cost more, it would result in a greater understanding of how to manage finances and how best to plan for the future.

“Currently there is no onus on the employer to push through this sort of learning program, but in my opinion staff members should be made aware that careful management of finances can reap significant benefits.”

If you are unsure about whether you could benefit from financial advice, or would like to speak to a top-rated adviser in your area to ensure you are making the most of your money, visit the VouchedFor website.

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