Understanding the importance of saving.

1st May 2017

Following the launch of the Lifetime ISA this month, pensions as a savings product has yet another competitor vying for savers’ attention. Pensions Age asks: How can pensions be made more attractive to savers? 

Jonathan Watts-Lay, Director, WEALTH at work, a leading provider of financial education, guidance and advice in the workplace comments; “I believe employers need to help their employees understand the importance of saving, whether this is for the short term for items such as a car or holiday, the medium term such as a first house purchase, or the long term such as retirement.”

“Different savings vehicles are clearly needed for different purposes, so whilst pensions are critical to long-term saving, they are not helpful for short or medium term saving. The failure to engage with younger employees is often because pensions are seen as the most important type of saving, yet for many buying a property or paying for a wedding may be seen as the priority. In view of this reality, the LISA should not be seen as a threat to pensions but rather as an appropriate savings vehicle for a first time house purchase. The key point is that employees need to understand when it is best to save into a LISA and when it is best to save into a pension – in other words they are complimentary rather than alternatives.”

“A relevant and well communicated benefits package, which allows employees to understand the savings vehicles available to them, how they work and the benefit they bring, is not only useful to individuals but is also beneficial to employers in helping them to recruit the most talented individuals, whilst retaining a happy and committed workforce.”

“The best way of supporting employees with their lifetime savings is through the provision of financial education, guidance and advice in the workplace.”