Teach employees to budget and save for retirement
A PLSA conference panel discussed the importance of financial education and opportunities for young employees to progress
Organisations should help employees learn how to budget so they can save more for retirement, according to Jeanette Makings, head of financial education at Close Brothers.
Speaking at the PLSA Annual Conference and Exhibition 2017, Makings said that 14% of employees surveyed by Close Brothers said they would save more for retirement if they knew how to budget better. "Now 14% is a lot," she said. "While this might come as a stab in the heart to those who are trying to impact wellbeing, this is actually easy to fix. If we can fix it, and 14% really do save more, then that's fantastic."
She also highlighted data from Close Brothers' Lifetimes Savings Challenge 2017 report, which polled 1,000 employers and 2,000 employees. The research found that a quarter (26%) of workers have not yet started to save for retirement.
The report also found that young people (aged between 18 and 34) were saving more than their older colleagues, with an average of £287 saved per month compared with £256 saved by those aged 35 to 54, and £258 saved by those aged 55 and over.
"Despite the fact that they get a lot of bad press, Millennials aren't different from the rest of us," said Makings. "They may behave differently in the way they interact with the world, but the ways they want to achieve their potential, contribute to society and leave their mark on the world are exactly the same as for previous generations."
David Finch, senior economic analyst for the Resolution Foundation, said that if employers want to help young people, they can start by considering what opportunities for advancement they offer.
"Everyone was hit by a pay squeeze due to the financial crisis, but young people experienced the biggest squeeze," he said. "As a result, they haven't made the same career progress that you might have expected, and they've fallen behind where the older generations were at the same point [in their careers]. Employers need to really think about progression opportunities to ensure their earning potential rises in the future."