Why you should talk about money and pensions with your employees

Why you should talk about money and pensions with your employees

Talk Money Talk Pensions Week is 18 – 22 November 2019 and aims to get the UK talking about financial wellbeing. 

A recent survey by free debt advice provider, PayPlan, found that over 45% of adults describe their pension knowledge as limited and only 20% have worked out how much income they will need in retirement.

Talking about money and pensions is important. It can give your employees the confidence they need to get help and find out who can best advise them on any problems. It can also be a great sense of relief for employees to share their problems, so they know they’re not facing them alone.

When should you start talking about the future of your finances?

It’s true that people can be more focused on their current finances, rather than their future ones. One in five PayPlan clients have at some point reduced their pension contributions to help to pay for everyday life, with 20% of 18-34-year olds opting out of paying towards their pension altogether.

Despite this, pensions are still a silent worry for adults. 70% of PayPlan’s clients reported that not having enough savings will, or is likely to, prevent them from retiring on time – with only 11% saying they think they will retire on time.

Improve your pension knowledge

One of the most frequently asked questions when it comes to pensions is how much people should save for retirement. The short answer here is that the amount you need for retirement will depend on health, lifestyle, debts and savings. No two people will ever have the same conclusion. So here’s some handy advice to pass on to your employees:

  1. Start saving for your pensions as soon as you can

The more time that you invest for retirement, the more you will benefit from compound interest – this is where you earn money on your interest.

You’ll also get tax relief from the government on the marginal rate. So, if you’re a basic rate taxpayer, the government will give you 20% more.

  1. Prioritise budgeting

The sooner that you get into the habit of budgeting and assessing your finances, the better. Being informed is one of the biggest powers that you can have over your finances. If you don’t know what you have coming in and going out each month then it’s unlikely that you’ll be able to take control of your finances.

In theory, most people will slow down in retirement, meaning their income needs can be reduced. However, it isn’t always the case. If you need to make loan repayments, or have your eye on a world-wide trip, then give yourself as much time as possible to have the funds that you need.

  1. Confused? Talk about it

Throughout 18-22nd November, Talk Money, Talk Pensions Week encourages people to start conversations about their money and retirement. Keep your eye on social media for new information or if you are still confused then seek support from a pension’s specialist.

Otherwise, speaking to a financial adviser can help you to optimise your finances to help achieve your financial goals and recommend the most appropriate pension fund for you in your circumstances.

If you would like to start a confidential conversation about money worries, including debt, visit: www.payplan.com/people-value/.

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