One in ten employees has major money worries
Money problems affect the performance of one in ten private sector employees. This figure rises to one in five for those earning £20,000–30,000 according to Towers Watson research.
The future of workplace savings shows that over 86% of employees now have less trust in their company pension than 15 years ago, up from 74% in 2008, when the company first produced this research. In addition, the study shows that only one in three companies believes they are getting value from their current benefit spend.
According to the research, corporate savings platforms are seen as a potential solution for the employee benefit market, with 75% firms intending to offer access to other savings products in the next five years, compared to only 6% that do currently. Furthermore, almost two thirds of employers intend to offer access to a wealth management platform in the next five years (only 2% do so already) and almost 80% of employers think it would improve employee perceptions of their benefits programme.
Philip Percival
Philip Percival, senior consultant at Towers Watson, commented: “These results should be a wake up call for employers and are an indication that the traditional method of benefit provision may not best fit today’s workplace. Clearly there is a need to rebuild trust in pensions which has been damaged by the pace of change in the private sector during the past decade. In spite of these pension changes, employers still spend significant sums on benefits and so it is disappointing to see it is not always felt to be delivering value.”
He added: “These findings show strong support for the concept of corporate savings, provided it is supported by financial education and financial planning.”
The report advises employers to think carefully about platforms, given the profusion of options in the marketplace, and that this can best be done by understanding the profile and financial aspirations of their workforce.
Mr Percival concluded: “There is a real need to rebuild trust in savings in the workplace, given the reputational damage pensions in the private sector have suffered during the past decade.”
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