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10 May 2023
by Neil Hugh

5 steps in building a financial wellbeing strategy that works

As the cost-of-living crisis continues to put the strain on people’s budgets, employers can help

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Financial wellbeing appears to be at a low point, with many feeling worried about how far their finances will stretch as costs continue to rise. Indeed, Standard Life’s Retirement Voice 2022 report, which asked almost 6,000 people from across the UK on their views on pension planning and retirement, found that:

  • Just 41% of people feel positive about their financial situation
  • Almost half are looking to cut back on everyday spending
  • Four in 10 would consider reducing or stopping their pension contributions

Money worries like these spill into people’s work life too. This can raise the business risks linked to having a workforce with poor financial wellbeing and resilience, such as lower performance and productivity levels, increased stress and absenteeism and difficulties retaining staff.

By investing in a financial wellbeing strategy that supports your employees, you can help bolster their financial capability and support them in their aim to achieve the financial goals that matter most to them. Not only that, employees who feel financially well are more likely to be healthier and happier.

Implementing a financial wellbeing strategy can give a competitive advantage over businesses that don’t. A study by PwC found that 76% of employees would be attracted to another company that cares more about their financial wellbeing.

Employers think a financial wellbeing strategy is important – but not all have one.

In an annual employer survey by Standard Life tracking employer needs and challenges, nine in 10 employers say that having a financial wellbeing strategy is important. But only half (52%) have a such a strategy in place. And given the effect that poor financial wellbeing can have on individuals and businesses, more needs to be done to help close that gap.

How to build a financial wellbeing strategy:

1. Engage with key stakeholders

To make the most impact, it’s important to get buy-in from key business stakeholders. This means engaging not only with your HR or reward teams, but with your leadership team too. Senior managers set the tone for direction and culture within the workplace, so it’s important to get them on board.

Consider creating a business case to promote the benefits of supporting employees’ financial wellbeing and outline how it can support the strategic direction and values of the business. If you have a broader health and wellbeing strategy, highlight the ways in which adding financial wellbeing support can enhance it. Crucially, include the well-documented risks and costs associated with having a workforce that is financially unwell.

2. Understand employee needs

Financial unwellness affects people differently, so there’s not a one-size-fits-all approach to helping. Also, there can still be a stigma attached to having low financial capability, leaving some people feeling uncomfortable or unwilling to discuss their financial worries. Research by The Money and Pensions Service reveals that 81% of UK adults avoid talking about money.

Enlisting senior stakeholders to normalise conversations about money can go a long way to encouraging people to open up. Doing so can also help you understand what matters most to your employees.

3. Look at your benefits

It’s worth taking a look at your current employee benefits package, because you may find that you offer some financial wellbeing support already. It also gives you the opportunity to plug any gaps.

Are your employees aware of what’s available? Is it easy for them to find and access?.

A good place to start is to improve signposting through increased communications. Consider creating a regular newsletter to remind employees of the support available.

4. Provide easy-to-understand financial education

Standard Life’s research revealed that just 51% of people are comfortable that they understand financial products. Meanwhile, 50% of people feel overwhelmed by the amount of information on pensions and 41% don’t know what to do with it.

Financial education is key to a person’s overall financial wellbeing and can help them make confident decisions about their money. So providing employees with easy-to-understand financial education should form an essential part of your financial wellbeing strategy.

5. Keep evolving your financial wellbeing strategy

Creating a financial wellbeing strategy isn’t a one-off task, and it’s likely that you’ll need to evolve it to meet the changing needs of your employees. For example, think about the ways you could help employees budget their everyday spending, find lost pensions, buy their first home, or plan for retirement.

Ultimately, given the widespread impact of financial worry and the ongoing cost of living crisis, implementing a financial wellbeing strategy is quickly becoming a must-have rather than a nice-to-have – so now is the right time to build one.

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In partnership with Standard Life

Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.

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