Financial Education to improve the financial literacy and wellbeing of your people
Financial Education provides employees with information and guidance relating to their personal finances. It should cover not only the employee benefits they receive at work such as savings and pensions, salary sacrifice schemes and insurance products, but also issues that extend outside the workplace for example, getting on the housing ladder or dealing with debt. It’s aim is to provide the relevant skills and knowledge that enables all individuals, regardless of age, wealth or lifestyle, to have control over their finances and thereby improve their Financial Wellbeing.
With treble digit growth in both 2015 and 2016, Financial Education has caught the attention of the world’s leading HR, Pension and Reward leaders.
Never before has there been an employee benefit with such diverse reach which impacts so many – from a school leaver understanding their first credit card to a retiree planning inheritance.
For the one in four employees who are suffering some sort of financial distress, often unknown to you, a personalised and timely Financial Education program will improve their understanding and confidence and organisation of their finances. Over time, this means less distractions at work meaning they’re less worried and more focused on their job.
By building an existing reward and package into the Financial Education syllabus, 90% of our clients agree that Nudge helps their people better understand their company benefits. We call this ‘Reward Alignment’.
By tracking your people’s engagement with the Financial Education programme, we’re able to provide unique insight as to their needs, interests and priorities. Our clients use this data and insight to help shape their future reward strategy.
There are a number of ways that Financial Education can be used to boost employee engagement with benefits offered via Salary Sacrifice which provide National Insurance savings to both employees and their employers.
As a result of promoting Salary Sacrifice using Nudge, Virgin made their Financial Education programme cost-free for the company.
Approximately one third of medical and disability insurance claims are attributed to stress with research suggesting that 41% of these are linked to financial stress. Improved understanding and organisation as a result of Financial Education reduces stress which in turn reduces the associated insurance claims and costs. A recent case study saw a whopping 21.6% saving on insurance as a result of Financial Education.
The majority of employees are not on track to receive the retirement income they expect and more importantly require, to be able to retire when they expect to. Meanwhile, this also presents challenges to their employers who aren’t able to effectively succession plan. The proactive strategy to manage this situation is commonly known as Workforce Planning.
Over 70% of employers cite Workforce Planning as a key driver for providing Financial Education with the aim of giving employees the context and advice to be able to make life changing decisions sooner rather than later.
As a result of the Retail Distribution Review, the number of people who use a financial adviser has fallen by 30% and for many of these people, Financial Education can fill this gap.
With Financial Education helping people understand products, it’s strange to think how flex even works without Financial Education!
Here at Nudge, we have always said that Financial Education should be dovetailed with the reward package – we call this ‘Reward Alignment’. This is the ongoing process that our clients use to ensure that Financial Education:
Flex is transactional so typically has a surge of activity once a year. Meanwhile, Financial Education engages throughout the year. Nudge client, Samsung, succeeded in improving logins at their Annual Window to 94% by using our segmented communication strategy. In addition, 88% of their people spent all of their benefit allowance up from 60%.
Traditionally, the business model for Financial Education has been dependant on the sale or distribution of products such as loans, pension advice or wealth management. Our approach is different. We are 100% independent and focused on education, giving your people the confidence, context and clarity they need to make the right decisions to improve their Financial Wellness.
Read the 4th edition of our independent research which analyses and dissects how Financial Education is being adopted by leading organisations.