They say any business is only as good as the people it employs – and whilst most employees seek job security in difficult economic times, an improvement in these conditions can lead to those same people looking for something bigger, better, or different.

Recruitment used to focus on salary, but as the makeup of the UK workforce has changed, so has what attracts people to a job and also, what makes them stay. Don’t get me wrong –salary is still important, but flexible working and a decent employee benefit package will be more important to more than you might think. According to a study by OnePoll.com earlier this year, less than 20% of employees surveyed were satisfied with the benefits package provided by their employer and 50% would leave their current employer if they thought they could get a position elsewhere with better benefits. Just 22% preferred extra pay over comprehensive benefits.

So, what can you do about your benefits package to ensure not only that you attract the right people to your company, but also retain them?

Be Competitive
Both salaries and employee benefits should be benchmarked against competitors in your industry AND regularly reviewed. It may be higher pension contribution, provision of income protection or company funded medical insurance that give you the greater choice over who wants to work for you. Conversely, your employees may be more likely to leave if they could get better benefits elsewhere.

By focussing not just on providing financial incentives but also your employees’ (and their family’s) wellbeing, you’ll ensure staff feel cared for and so closer to you, as their employer.

Provide things staff actually value
You may think you’re providing employees with a competitive benefits package, but do they appreciate it? In my experience, an employee’s age, earnings or personal circumstances may vary what appeals to them greatly. Employee surveys are a good way of understanding what your staff want and ensuring the benefits you pay for meet their needs.

Companies that match their benefits package to the actual wants and needs of their workforce, will find that employees are much more likely to engage with what is being offered to them.

Say “Thank You”
Often employees are recognised for their good work by way of financial rewards in the form of bonuses, but these can become ‘expected’ and so possibly not fully valued. Various benefits can be used as a way of thanking staff, in the form of a higher pension contribution, additional company funded benefits, retail vouchers or even an extra day’s leave, an example could be for rewarding staff for long service and loyalty to your company,

If your employees feel valued and cared for, they will feel a greater sense of loyalty to you as their employer – leading to increased productivity and so benefitting the business.

 

As mentioned, the working demographic has changed and will continue to do so in the future; so regularly reviewing your workforce will help you understand what motivates them and ensure your benefits package is fit for purpose. Whilst it’s not possible to prescribe exactly what will work for your company, it’s likely that a good mix of benefits will help promote a culture of health and wellbeing for your employees.

Wingate Benefit Solutions is experienced not only in designing employee benefit packages, but also reviewing and ensuring what a company has is fit for purpose. If you are looking to understand how your benefits package can aid with staff retention and recruitment, the please feel free to contact us to discuss this in more detail.

T: 01883 332260

@: info@wingatebs.com

Keep It Simple Stupid

Let’s be honest, pensions are not the most exciting subject in the world but we probably all acknowledge that they are very important. I have been to many a party, night out etc and have been chatting to people about everything and nothing when the old, ‘What do you do for a living?’ question comes up. In my mind, I want to say ‘dolphin trainer’ or ‘lion tamer’, but the words ‘I’m a Pension Adviser’ just comes blurting out and funnily enough I am left standing on my own…

The lack of excitement around pensions is not helped by the way that pension providers give information to consumers. Often we receive our annual pension statement through the post in the form of a big pack and if we are lucky, we’ll read the first page, maybe the second and simply file it in our dusty old pension file where the last 10 years annual statements are all stored. We all have the best intentions of reviewing our pension/s one day but that day tends to happen when it’s a little too late and retirement is looming leaving us with little time to take any remedial action on the value of our pension.

A recent government Automatic Enrolment review has found that less than 14% of people read and understand their annual statements and this represents a “missed opportunity” for the industry to engage and educate savers. As a result, the Pensions Minister has suggested a new simplified two-page annual pension’s statement in a bid to provide a best practice template for the industry. The proposed simpler annual statement consists of just two sides of A4 paper and includes the information that matters most to people saving for retirement. It clearly signposts to other detailed information that can sit separately on an insurance company website. This reflects legal requirements and can be amended by providers using their own branding. The simpler annual pension statement is available to view at the following link https://www.plsa.co.uk/Policy-and-Research/Document-library/Simpler-annual-pension-statement

Whilst this is a good step forward, there is still a long was to go to raise the profile of pensions. It seems as though the balance of responsibility is moving away from the government and some of this responsibility sits with the employer to help with pension education.

Even if staff are not actively engaged with pensions, spending 30 minutes a year to understanding whether your investment is right for you, understanding what you are on track to receive from your pension and the state pension and how to make up any shortfall, is not an overly onerous commitment but it’s hugely important and beneficial.

Wingate Benefit Solutions has designed a pension employee engagement service for employers to try and de-jargonise pensions for employees (just like the proposed new statements) with a view to getting staff engaged with pensions and planning their futures. If you a looking to understand how pension education can help increase employee appreciation of the provided pension arrangement leading to greater staff retention and engagement, please do not hesitate to contact us.

As we’ve frequently referenced in previous insights, an employee’s mental health can have a significant influence on their performance and behaviour at work and one of the biggest issues affecting an individual’s emotional wellbeing is their financial situation.

There is often a link between someone struggling with money and poor mental wellbeing and if an employee is feeling low, it can make it tougher for them to manage their money. I regularly meet employees to discuss their pension planning and there seems to be a common theme of financial anxiety.  This clearly has an impact on the individual but is also likely to affect your business.  An employee who is worrying about money may find it difficult to concentrate on decisions, or they may be losing sleep or feeling worried which will impact their performance and productivity at work.

Financial worries take many guises, from struggling with debt, saving for a first home through to people in their late career striving to plan for the retirement they desire.

In recent years, there has been a shift in responsibility for financial matters from the state and employer to the individual and it is becoming increasingly clear that many employees are not equipped with the knowledge to make confident, informed decisions about their finances.

So what can a company do to help its staff?

Helping support an employee’s financial wellbeing through the provision of education services is an important part of any employee benefit strategy.  In my experience, many companies think of financial education as an expensive ‘nice to have’ and prioritise other benefits such as pension contributions, life and health insurance.  However, financial education and improving an employee’s financial wellness can have a much more positive impact on performance and wellbeing than other company-funded benefits.

Financial education is more effective if it is delivered when it’s most relevant.  The financial concerns and worries for someone in their early career are very different from those who are in the middle of their working lives or for those who are planning to face the transition in to retirement.   The ways in which the education is delivered should also be varied to reflect your employee’s requirements.

By offering employees help in managing their finances, employers are making a long-term investment in their workforce.  The benefits of financial education are clear; helping to support employees and improve their mental health will have a positive impact on their lives as well as business.

 

Lifetime ISA’s or LISA’s as they’re known were announced in March 2016’s budget as a new form of ISA designed to encourage longer term savings for the younger population for two key purposes, purchasing a new home and/or retirement. These alongside the auto enrolment requirements are likely to leave younger employees with ever more questions as to the best long term savings route for them.

LISA Q&A

LISA’s are due to be launched on 6th April 2017 and to help we’ve provided below a simple Q&A covering the most common questions we get asked on this subject. Please note these are provisional answers to the questions as we understand them today BUT could change prior to the 6th April 2017 launch so please treat this as general ‘yet to be finalised’ information.

  • Who can have one? You must be aged over 18 and under 40 (on the 6th April 2017)
  • How much can be paid into a LISA? £4,000 per tax year either regularly or as lump sums. The £4,000 counts towards an individuals total £20,000 ISA tax year allowance (from 6.4.17)
  • What is the Government’s bonus? 25% of the contributions paid in e.g. if you save £4,000 in a tax year the bonus paid at the end of the same tax year would be £1,000
  • How long is the bonus paid for? Until you reach age 50. Therefore the maximum bonus anyone could receive is £1,000 x 32 (age 18 – 50) i.e. £32,000
  • Are there any withdrawal penalties? If money is withdrawn prior to age 60 for any other reason other than to pay towards your first property then you will pay a 25% penalty on the money withdrawn. This withdrawal penalty does not apply in the first year i.e. prior to receiving the first bonus. There has been talk of other instances that an individual may be able to make penalty free withdrawals prior to age 60 but these are unlikely to be in place by the 6th April 2017 launch
  • Explain the two specific LISA purposes? 1) For first-time buyers to use towards a residential property (costing less than £450k in London and £250k elsewhere) that you then live in and 2) To use towards your retirement once you reach age 60; you don’t have to have actually retired this means assisting toward later life expenditure
  • Is the money taxed in the LISA and when I take it out? No
  • What can a LISA invest in? Both Cash and Stock & Shares

LISA or Pension?

LISA’s provide another positive long-term savings option for the younger demographic and as such are to be encouraged however we don’t see these as a direct replacement for a pension but inevitably employees will start to consider one against the other once LISA’s become available and more publicised.

LISA have the advantage over pensions of being able to access the money tax free at anytime (although there could be a penalty for doing so) plus they can be used towards the cost of purchasing a first home. The money can be withdrawn tax and penalty free from age 60.

However a pension with a fully or part matched contribution from an employer (such as with Auto Enrolment) and/or 40% higher rate tax relief on a contribution would usually make the pension financially better than a LISA. In addition you can access money from a pension from age 55, the money is usually Inheritance tax free, it doesn’t affect any (pre retirement benefits entitlement and is protected from creditors in bankruptcy, all of which are not features of a LISA.

As with all financial matters it comes down to the individual’s personal circumstances, priorities and needs as to whether one option is better for them than another or whether a combination of different arrangement would be best.

Employee Financial Education

What the introduction of LISA’s does is further highlight the huge value employee financial education can provide. A facility that helps employees understand their long-term savings options which as a result ultimately leads them to make appropriate long-term financial decisions, could actually be life changing.

 

 

If you would like to discuss LISA’s or the options Wingate have for the provision of employee financial education please contact your usual contact or one of our strategic benefit consultants on:

T: 01883 332260 or

e: info@wingatebs.com

 

This information is based on our current understanding of legislation which can change without notice.  Professional advice should always be sought prior to making any changes to your arrangements or deciding on any action in this respect. This information should NOT be treated as personal advice or recommendation.