It’s not just about pensions…
I f you have reached the final level of phased pension contributions in April 2019, finding ways to ensure your employees are engaged with their pension and finances is key. Many employees are now paying (and receiving) more money into their pension funds than ever before, and indeed the levels of savings are higher than they were just a few years ago. For employers, the likelihood is that some of your workers still won’t understand how pension schemes work, and as a result may disengage with the subject. However, with pension contributions now one of the highest costs to your business, should you be doing more to help your employees engage? Running education group sessions, or 1:1 meetings with Independent Financial Advisers will help your employees to understand and value their pension, engage with the scheme from a younger age and will give them the tools and information to help them build a better retirement – and it needn’t be as expensive as you may think.
But are pensions the only answer? Workplace ISA savings schemes are becoming increasingly popular, giving employees the opportunity to pay into an ISA via payroll, which then allows them to build up a rainy day fund – with substantial tax benefits. This initiative is particularly suitable for those employees who may not be able to pay into pensions (or receive employer contributions) due to having reached lifetime or annual limits, as it allows them to still receive a tax efficient saving benefit from their employer. There are also other ways your employee benefits package can incorporate planning for the future, such as Will writing which is an employee benefit we see being offered more widely. While the purchase of the Will itself is not usually funded by the employer, it does give an employee the opportunity to write a Will and protect their finances.
As an employer you can also support your employees with their spending habits. You may say that isn’t any of your business what your employees spend their money on, however employees who are in financial difficulty are highly likely to see an increase in their stress levels and as a result you may see a negative impact on an individuals’ work, either through increased sickness absence or work of a lower standard than before. Here are some tips on a few “everyday” expenditures your employees may have, and how that can rack up over time – talking to your employees about these may be an easy introduction to making them aware of the importance of budgeting and saving.
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