Older people less likely to take up employer financial advice

Millennials are nearly five times more likely to use workplace financial advice than those approaching retirement, according to a new study.

The new ‘Changing Trends of Financial Wellbeing’ report from Close Brothers reveals a generational disparity when it comes to financial education in the workplace, with millennials (aged 25-35) nearly five times as likely to take advantage of the financial advice or guidance on offer through their workplace than those approaching retirement (38% vs 8%). Around two thirds of the older cohort explicitly stated that they were unlikely to use it.

Close Brothers says the figures show that employers need to think about addressing generational imbalances and appetite as they develop any financial education programmes.

It also shows that only around one in five  workers would turn to their employers for financial advice or guidance with men more likely than women.

The report said that, while around two thirds of UK employees said that their employer had provided guidance or advice on workplace pensions, shares and benefits, just 26% said they had had financial education provided to them, falling to 16% of those approaching retirement. Overall, 11% said they had received it in the preceding 12 months, falling to 6% among 55-64 year olds.

Moreover, a third of workers think that their personal financial health is important to their employers, compared to 40% who think it’s unimportant. But those who do receive financial advice or guidance from their employer are overwhelmingly likely to say they trust it.

When asked to identify the top five tools things that would help improve their savings habits, one in 10 employees identified workplace financial education, 10% face-to-face financial advice and 7% online financial advice. But for those approaching retirement, the top three were a higher salary (57%), lower income tax (25%) and more tax incentives for saving (26%).

Jeanette Makings, Head of Financial Education at Close Brothers, said: “Despite their time of life those approaching retirement are seemingly the hardest to reach, but this may be skewed by the proportion that still have a defined benefit pension to rely on. Nevertheless, with providers and some employer exercises still targeting defined benefit pension transfers, it is essential to ensure employees approaching retirement have access to impartial financial guidance and advice. It’s also clear that when designing financial wellbeing programmes, the different generational attitudes need to be taken into account for these programmes to be truly impactful.”

She added that employers had a vital role to play in helping employees be more confident about their finances, particularly at a time of increased anxiety. She said: “Many workers will now be experiencing hugely increased anxiety surrounding their finances and so they need all the support they can get in such uncertain times. And given the financial challenges presented by Covid-19, businesses cannot afford to be complacent when it comes to financial wellbeing.”

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