Working with employers is key to improving the financial education of employees

The Chartered Institute of Personnel and Development (CIPD) is calling upon the Government to ensure that its approach to improving financial education among the general public is joined up with work that is already being done by employers and professional bodies. This is the main recommendation in the CIPDís response, submitted today, to the Thoresen review of financial advice. The Treasury commissioned the review to consider how best to raise levels of general financial education and awareness among the general public.

The CIPD has produced its own financial education guidance, available free from the CIPD website. The guidance demonstrates the role that financial education can play in improving financial awareness of staff, reducing labour turnover costs and increasing employee pension contributions. Key benefits to employers of improving financial education include:

A better understanding amongst employees of the true value of the benefits package provided by their employer;

A reduction in stress or poor performance caused by employees non-work related money worries;

Potential reduction in employee fraud;

Employees better able to make an informed contribution to improving the organisationís financial performance.

Charles Cotton, CIPD reward adviser comments, ìThe CIPD believes that any national approach to improving the financial understanding of consumers must build on the work already being carried out by employers. As our guide shows, many UK organisations are now offering financial education to their staff, which can deliver benefits for both the employee and the organisation.

Cotton continues, ìRelated research shows that any national education programme must be developed in tandem with peopleís individual learning styles. Not doing this will result in failure. The Government would do well, therefore, to focus on the educational and financial aspects of their programme in equal measure.î