Corporate reputations could be at risk as employees face retirement in poverty

14th July 2010

However, nearly three quarters of companies (72%) believe that corporate reputations are potentially at risk if employees face poverty in retirement. For example, if employees rely solely on the provision made by their employer, they could face an uncertain financial future. Indeed, if employees retire with inadequate retirement savings, they may well claim they have not been adequately informed or supported by their employer. Such an outcome could have an impact upon key elements of a company’s corporate social responsibility performance with implications for both the workplace and the community.

Jonathan Watts-Lay, Director of WEALTH at work comments, “It is becoming clear that corporate reputations could be at risk if employees blame their employers for the lack of information, education and guidance about their retirement savings”.

Over two thirds of companies (68%) provide financial education at retirement with an increasing trend for it to be scheduled well in advance of retirement – in some cases, five years or more prior to the anticipated retirement date. This was confirmed by over half (57%) of FTSE 100 companies who responded to the survey.

However, only 38% provide general financial education, yet over three quarters of companies (76%) think that the provision of financial education is set to increase.

Jonathan Watts – Lay also comments “Any financial education should include the many savings opportunities available to employees in the workplace. As a consequence, greater value is derived from their employment whilst ensuring that the company remains competitive in the job market”.

Please see a copy of the ‘Survey Results’ attached.