Actuarial Post - Talking about Group Risk in Financial Capability Week

Levels of financial capability remain stubbornly low across the UK and 27 million working-age people in the UK don’t have a sufficient savings buffer to allow them to cope with a significant income shock. 21 million don’t even have £500 saved to replace a fridge or mend a car and only half of people with families have any life insurance. Group Risk Development (GRiD) believes this is something that employers should be addressing with their staff.

In keeping with this year’s Financial Capability Week (FinCap Week), organised as part of the Financial Capability Strategy for the UK, which is aiming to get more people talking about money, GRiD suggests that employers should take the initiative and discuss the benefits of employer-sponsored life assurance, income protection and critical illness with their employees.

While many businesses do offer these financial protection products to their people, GRiD believes there are three key issues at stake for those that don’t:

• Organisations may believe they are more expensive than they are.
• They may offer what they believe employees will consider as more desirable, short-termist perks rather than group risk benefits.
• Lastly, some organisations might offer life assurance, income protection and critical illness as a voluntary benefit but not help employees to make an informed decision through good communication in order to understand them.

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