Raconteur

Workplace Pensions special report 2018

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RACONTEUR.NET 03 /workplace-pensions-2018 Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 3877 3800 or email info@raconteur.net Raconteur is a leading publisher of special-interest content and research. Its publications and articles cover a wide range of topics, including business, fi nance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclusively in The Times and The Sunday Times as well as online at raconteur.net The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media F inancial wellness has become a buzz phrase in the last few years. For employers, it refers to anything that supports the fi nancial security of their employees and often involves a move from nar- row benefi t packages to wider and more fl exible programmes of bene- fi ts and education. A host of recent research has shown the impact of fi nancial well- being issues in the workplace. For example, a recent report by the Reward and Employee Benefi ts Association (REBA) showed that 25 per cent of employees say that fi nan- cial concerns aff ect their ability to do their job. The 2017 Willis Towers Watson Global Benefi ts Attitude Survey also highlights a direct correla- tion between employees' fi nan- cial concerns and performance at work through sick days, produc- tivity or engagement. The survey says employees are looking to their employers for support. Some are responding with programmes that support fi nancial wellbeing, but employees are lukewarm about what they have seen so far and engage- ment remains low. Meanwhile, wellness product pro- viders talk of an explosion in the market over the last few years. A sur- vey by workplace fi nancial educa- tion provider Nudge Global showed a signifi cant increase in employers providing a fi nancial wellness pro- gramme between 2013 and 2016. In 2016, 45 per cent of companies had a fi nancial wellness programme or were implementing one, up from 26 per cent in 2014, and 50 per were considering it, up from 20 per cent. But some of these programmes are still narrow and there is room for progress towards holistic fi nan- cial planning covering all the areas that employees need help with such as debt, pensions, saving, tax and insurance. In 2016, 96 per cent of companies wanted to provide holis- tic fi nancial education, but only 42 per cent did so. Financial wellbeing expert Jason Butler says: "I detect a much stronger awareness that fi nancial wellbeing solutions are an impor- tant part of recruitment and produc- tivity. But I'm less convinced that it is translating into signifi cant tangi- ble action." He says many good tools and ser- vices have become available to support wellness. For example, fi nancial advice fi rms provide paid- for seminars and personal advice for those who need it. Technology com- panies provide digital education platforms that provide individual- ised insights and prompt employees to action at appropriate moments. Others provide wellness content linked to products such as loans and savings accounts, perhaps at a nego- tiated discount for the employer. "The challenge for employers is that they need help understanding which platforms, interventions and semi- nars they need, and who will pay for them," says Mr Butler. "Each fi rm's needs are diff erent. For example, if you employ lots of millennials your needs will diff er from companies with lots of part-timers, older workers or gig economy workers. Public sector diff ers from private and so on." Minh Tran, director at benefi ts consultant Willis Towers Watson, says provision of holistic fi nancial planning is increasing, but from a small base of early adopters. He agrees that employers are increas- ingly aware that helping address fi nancial worries should promote a more engaged and healthy work- force, and so attract talent. Mr Tran says providing a wider choice of fl exible, alternative sav- ings, such as workplace individual savings accounts, general invest- ment accounts and even debt facil- ities, helps maximise the impact of existing benefi ts budgets. It also recognises the diverse needs in the workforce, which should improve employee engagement. In future, he expects tax-effi cient fi nancial advice using the recently intro- duced pension advice allowance will also be popular. There may be some short-term obstacles but, in the long term, broader workplace packages will become more common as compa- nies need them to attract the best talent, he says. Mr Tran says Willis Towers Watson's research shows that the way to improve engagement with wellness programmes is to use new technologies together with an eff ec- tive communication strategy across multiple platforms and channels, including mobile, PCs, paper based, group presentations and one-to- one sessions. The REBA survey confi rms that the role of technology in holistic planning is set to increase. It shows that 19 per cent of employers have a wellness technology platform in place, but 61 per cent have one in planning or development. Andy Woolnough, human resources and payroll solutions director at soft- ware fi rm Equiniti, says: "To help win and keep the best talent, employers have become more proactive in recog- nising the diff erent needs of diff erent generations in their workforce. "People ana ly tics – technolog y that uses data to link 'people strat- eg y' to wider business strateg y – is a growing par t of that. Sof tware can a lso give people individua l- ised information in the right time and contex t for them, and meas- ure the va lue of each strateg y more precisely. Plus it can ma ke f inance more user friendly with techniques such as gamif ication [ma king sof tware work like a com- puter game]." Rory Murphy, chair of the Merchant Navy Offi cers Pension Fund, agrees that companies will off er more holis- tic planning as awareness grows. However, saving for retirement is still a crucial part of fi nancial well- ness for everyone and it needs to start early. There is a danger that greater fl exibility will be at the expense of pension provision, leaving employ- ees with insuffi cient retirement sav- ings later in life, he says. Financial advice will also help support wellness and Mr Murphy says companies should off er it using the new allowance. "I expect they won't because they tend to focus on short-term profi ts and shaving costs," he says. "But the evidence shows that if you invest in and look after your staff , you will get a better return in productivity. Enlightened companies with well- being programmes that include fi nancial education will tell you that their productivity is increasing 5 to 10 per cent." Holistic fi nancial planning to target savings gap WORKPLACE PENSIONS @raconteur /raconteur.net @raconteur_london Employers and pension providers are increasingly off ering lifetime fi nancial planning in a bid to engage staff in saving for retirement TIM COOPER Award-winning freelance financial journalist, he writes regularly for publications including The Spectator, London Evening Standard, Guardian Weekly and Weekly Telegraph. PÁDRAIG FLOYD Former editor in chief of the UK pensions and investment group at the Financial Times, and ex-editor of Pensions Management, he is now a freelance business writer. VIRGINIA MATTHEWS Freelance writer and editor, she contributes regularly to the national and specialist press on a range of business, education and consumer topics. Distributed in TIM COOPER Publishing manager Reuben Howard Digital content executive Elise Ngobi Head of production Justyna O'Connell Design Grant Chapman Kellie Jerrard Samuele Motta Production editor Benjamin Chiou Managing editor Peter Archer Published in association with CONTRIBUTORS Yulia Grigoryeva/Shutterstock FINANCIAL WELLBEING raconteur.net Head of design Tim Whitlock £50k 25% 56% of the UK population now expect to stay in full-time work past 65 do not know what level of retirement income they will receive average amount accumulated in a pension by 2017, up from £36,000 the year before Aegon 2017

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