Opinion  

There is space for advice in workplace benefits

Amy Austin

Amy Austin

Pay, holiday entitlement and flexible working are arguably the top three benefits people look for nowadays when applying for a job.

But surely with the crisis we are in at the moment with rising inflation, soaring energy costs and the ongoing fallout of the Covid-19 pandemic, people should be looking at benefits that make their money go further.

Don’t get me wrong, everyone loves getting free pizza and drinks at the end of the week, and at the FT we are lucky enough to have a cake trolley wheeled out every Wednesday afternoon. But should these trivial things blur people’s vision as to what is really important?

The largest companies in the UK have come into the firing line of the pensions minister over their lack of employee savings offerings.

Guy Opperman has challenged the chief executives of the FTSE 100 to reveal what payroll savings they offer.

The outcome is pretty bleak, with half of companies ignoring the minister and the others saying their offering was “pretty limited”.

My guess would be that most companies focus on their retirement benefits and see this as sufficient way to get their employees to save.

Obviously a business that doubles pension contributions and encourages people to stay in the workplace scheme is a good thing, but more needs to be done.

Where’s the advice?

While I am very grateful having an employer which has an amazing pension scheme, giving me a great head start on my retirement savings, I wish I had more support on how to make the most out of my pension.

For example, at the age of 28, is it acceptable for me to stay in the default investments chosen by my provider or should I be taking more risk and looking to invest in other funds or even look at more ESG-focused funds?

All of these are good questions, but ones I cannot answer myself – I need advice.

Therefore, there is a case to argue that employers could offer to pay for a number of advice sessions as part of an employee’s benefits package.

I know many would argue that this is why the advice allowance exists, which allows people to use their pension savings to get regulated financial advice.

But it would be fair to say this government initiative is not working. Not all pension providers offer it, it is rarely signposted and most savers do not even know it exists.

Instead of this allowance, employers could allocate a certain amount of funding so that each employee could have a number of advice sessions. For example, it could be that workers are given £1,500 every year to fund several face-to-face advice sessions.

Or, instead of running it on an individual basis, the employer could work with an adviser to run a day of workshops where workers can get answers to questions such as: how and should I consolidate my pension pots and how do I go about changing my investments?