Study shows pensions & financial wellbeing lethargy from employees and employers
Aon plc (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, has found signs of lethargy from both UK employees and employers in the results of two recent research surveys.
In Aon’s DC pension and financial wellbeing employee research 2021, which surveyed over 2000 UK employees, one in three respondents said that nothing had been preventing them from saving more, a figure which is just higher than those who said they couldn’t afford to save. Additionally, one in five respondents in their early- or mid-career said they are too busy to sort their finances.
The survey also found that one in four people do not think they will retire, and that 87 per cent are expecting a shortfall in retirement income, based on their current provision.
From an employer perspective, Aon’s Benefits & Trends 2021 Survey of over 300 UK employers found that 61 per cent do not feel they’re doing enough to support employee financial wellbeing and pensions through communications.
A further issue appears among employer actions and employee perception. Sixty-five per cent of employers stated that they are offering financial education services to employees, yet only 15 per cent of employees think that their employer provides good support.
Another area where there is a disconnect is in communication. To avoid this, employers have to evolve, both in responding to employee expectations and in taking a new approach to financial wellbeing communications. Just over 30 per cent of people over the age of 55 state that email is their preferred method of communication, for instance, yet 71 per cent of schemes use email as their main communication method.
Martin Parish, UK Lead, Workplace Pensions & Financial Wellbeing, Aon, said:
“Not only is this communication disconnect at odds with current demand, access to financial education is in the top 10 of what employers believe employees expect, at 43 per cent. Yet 61 per cent of employers either agree or strongly agree that they are responsible for influencing employee financial wellbeing.
“There are clearly tensions in financial wellbeing delivery. One is that employees tend to follow the employer’s lead. For example, Aon’s research tells us that many people have the capacity to save, yet not the time or motivation. If employers feel they can play a vital role in supporting employees, then the workplace can act as a powerful conduit of support. Employers can give time to employees so they are able to manage their finances and long-term savings – much like they’d provide time for learning and development – and it is especially important now with so many people working very long hours.”
Aon’s research found that financial wellbeing should also feed into workplace resilience; if employees are not worried about health or finances, they are likely to be more productive and efficient. Indeed, the Aon Rising Resilient report found that 88 per cent of resilient employees agreed that their employer enables them to take care of their personal needs, compared to 23 per cent of non-resilient employees.
“Financially stressed employees can be distracted and disengaged at work. They may spend significant portions of their day worrying about money.
“By providing them with the ability to understand their challenges and the time to set goals and manage issues, employers can move from lethargy to action. Not only will they help an individual employee’s resilience, but also the resilience of their workforce as a whole.”
For more information, access the Benefits and Trends Survey results here and Aon’s DC pension and financial wellbeing employee research here.