Financial education programs from financial institutions and personal finance websites have grown phenomenally in popularity over the past five years, with many also calling for financial education to be added to the central curriculum in schools.
Financial education is more important than ever as the wide-ranging payment holiday help and furlough schemes come to an end, leaving more Brits struggling to manage their finances.
These times of financial stress can be an opportunity for employers to proactively support their people. The pandemic has changed the way people think about money and gives employers an easy way in to raise the subject of financial wellbeing with their staff.
We are pleased to see that our data shows that all workplace pension providers offer some form of generic financial educational materials and support for their members.
All providers have stated that they support members in understanding how good their level of financial knowledge is. They offer this online (with guides, case studies, and links to third party materials) as well as via applications and video content. Other than Royal London all workplace pension providers also offer face to face support either in person or via screenshare.
When it comes to basic general financial education such as supporting members to understand ‘what is a credit score’, ‘how do I budget’ or ‘what is an emergency cash fund’, all workplace pension providers provide materials online or via the member app.
Other than Royal London, all providers offer some form of face-to-face support with this basic education. Aegon Workplace ARC is the only provider who does not offer video content in this area.
One of the most obvious areas for support with financial education provided by workplace pension providers is pensions and retirement saving.
It will come as no great surprise that all workplace pension providers offer materials to explain what a pension is. Most (other than Hargreaves Lansdown, Mercer Master Trust Aviva, Mercer Master Trust Scottish Widows and True Potential) will also include a links on their websites or portals to the Pensions Advisory Service, the Money Advice Service and The Pension Regulator. Other than Mercer Master Trust Aviva and Mercer Master Trust Scottish Widows, all providers also include a link to Pension Wise.
All providers offer information on the Basic State Pension. Other than for Mercer Master Trust Aviva, Mercer Master Trust Scottish Widows and True Potential this also includes links to the State Pension Forecast with Gov.UK.
Death Benefits education is also provided by most workplace pension providers. Aegon Workplace ARC, Mercer Master Trust Aviva and Mercer Master Trust Scottish Widows are the only providers who do not offer information on death benefits before retirement. All other providers can deliver information on death benefits before retirement, explanatory information on Expression of Wish forms, and information on death benefits after retirement.
When it comes to educational materials on the member’s retirement options, our data shows a more comprehensive picture than was seen a year ago with more education on offer from workplace pension providers.
Our data shows that all workplace pension providers provide information on the various retirement options which are available.
Other than Mercer Master Trust Aviva and Mercer Master Trust Scottish Widows, all providers offer information on the basics such as the Open Market Options, the provision of wake-up packs, information on uncrystallized funds pension lump sums (including information on annuities and flexi-access drawdown) and explanatory information on available fund and investment choices.
This compares to a year ago when some providers were not offering education on complicated options such as information on uncrystallised funds pension lump sums, investment linked annuities, and life styling.
Education material on tax changes was also a little patchier with 14% of workplace pension providers not offering any information on this.
Debt management is also widely supported, however there are still a number of providers who are not providing educational support on this popular subject for their members.
All providers other than Aegon Master Trust and Aegon Workplace ARC also provide information on the importance of having an emergency cash fund. They also do not provide information on credit cards and loans, although they are joined in this by Hargreaves Lansdown, Standard Life, Standard Life DC Master Trust and True Potential.
However, all providers provide some information on budgeting and saving, as well as providing information on other savings products beyond pensions.
Wills and will-writing is one area of financial education that is slightly less well supported by workplace pension providers.
Whilst Aviva, Cushon, Fidelity, Mercer, Royal London, Scottish Widows and Standard Life will provide information and education on wills, only Royal London, Scottish Widows and Standard Life offer a service to assist the member in setting one up.
All providers, other than True Potential, also have the ability include bespoke financial educational content provided by the employer as part of their generic financial education.
Overall, workplace pension providers support a wide range of pension and financial education for both members and advisers, which is very encouraging to see.
However, it is worth noting that no single provider offers all aspects of financial education which we asked them about. This is a growing area and one which we know is high on the agenda for many providers, therefore we expect to see further developments in this space over the next few months.