Jonathan Watts-Lay
Director, WEALTH at work
New research reveals the many financial wellbeing risks employers are concerned about, as well as what they plan to do about it in the future.
New research from the Reward & Employee Benefits Association in association with WEALTH at work has uncovered insightful findings on current financial wellbeing provision, as well as foresight into future trends.
Need for financial wellbeing support
Worryingly, over three-quarters of employers think a barrier to improving financial wellbeing support in the workplace is employees not knowing where to start when asking for help, and over two-fifths say that its existing support is unsuitable for employee needs.
It’s important that any financial wellbeing provision is suitable and effective for the workforce and that employees know how to access it. As people often struggle to manage their finances, they need holistic support for managing the here and now e.g. cost of debt, to longer-term needs such as saving for a ‘rainy day’ or pension savings and preparing for retirement.
Offering a range of support should
help employees feel financially secure.
Risks to employee financial wellbeing
The research also revealed that employers expect financial pressures such as inflation, costs impacting working parents such as childcare, rental costs, carer costs including eldercare, high interest rates on mortgages and high energy prices will be risks to the financial wellbeing of staff. Other financial wellbeing risks high on the list include insufficient retirement savings and a lack of financial literacy. Additionally, the mental wellbeing of the workforce was found to be a key driver for future financial wellbeing support.
It is well known that when employees do not fully understand their finances and how to address current difficulties, it can result in stress. A lack of understanding of finances can also result in poor decision-making. Helping employees to understand the key financial issues that relate to them is an effective way of overcoming these risks.
Future of financial wellbeing provision
To combat these concerns, it’s good to see that almost half of employers plan to make changes to their financial wellbeing offerings in the next two years. Many are focusing on helping employees by providing them with tools to better manage their money through offering financial education, one-to-one guidance and advice. Support is also growing for savings products to build financial resilience such as Workplace ISAs.
Offering a range of support should help employees feel financially secure whether they are new parents managing childcare costs, saving for a first home or planning for retirement. Ultimately, helping employees become more financially resilient is a win for employers too.
