5 tips to help employees build a savings habit, even in hard times
The cost of living crisis is affecting us all - in various degrees and in different ways.
As prices surge everywhere we look, from supermarket shelves to the energy meter, the idea of trying to set aside savings seems impossible.
But the lack of a cash buffer is causing many people stress as the crisis rolls on.
More than one in four people (27%) say not having an emergency savings has been the biggest cause of financial stress in the past six months.
Money worries not only affect our personal lives, physical and mental health, but also our work. Two in three working adults say financial stress affects their work performance, according to Claro Wellbeing’s latest research on The Workplace Today.
Employers are rightfully concerned about their workforces’ wellbeing, but may not know how to help. Here are some tips:
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1. Conduct a financial health check
Before you do anything, try and understand more about your employees’ financial situation. Some may be struggling with debt or trying to save for long or short-term goals. Consider asking staff to fill out an anonymous questionnaire about their money concerns so that you can tailor any guidance to their needs.
Don’t assume anything. For example, a high income does not necessarily mean someone is financially secure. In fact, it can often mask poor financial behaviour..
2. Consider financial wellbeing resources
There is a huge financial education gap since many of us were never taught about money at school. Many of us may not have learnt good financial habits from our parents growing up and as a result may not have a good relationship with money.
A financial wellbeing programme that includes accredited coaching, on-demand courses and interactive workshops could not only help your staff build a good savings habits, but also support them with their financial goals at each stage of their life. For example, buying a first home, starting a family and preparing for retirement.
A financial coach can offer one-on-one sessions tailored to the individual’s needs and suggest the best ways for them to save and how to set realistic goals, based on their circumstances.
Meanwhile, interactive webinars and workshops on saving and budgeting can be delivered to whole teams to help give them the tools they need to save effectively.
Consider a financial wellbeing provider that includes, in addition to face-to-face guidance, supporting technology to encourage good saving habits such as budgeting platforms, calculators and online courses.
3. Review your benefits
Are you offering a benefits package that your employees want? When was the last time you reviewed it? For example, while a cycle-to-work scheme may have been popular before lockdown, you may find there is less appetite for it now that more people are working from home.
Are there things you can introduce to help staff save? One free lunch a week, a travel allowance or allowing staff more flexibility to allow them to work from home and save the train fare, childcare vouchers or discount schemes, are all good examples.
As well as a financial wellbeing programme, could you consider offering other benefits to help employees save such as Share Schemes and Workplace ISAs. Financial education is a crucial part of engaging employees with these and how they work.
4. Ensure employees understand pensions
One of the most effective ways to save for the future is via a workplace pension scheme. But do your staff know this? While it’s difficult, especially for younger employees, to imagine saving for retirement decades in advance, especially during the cost of living crisis, good communication and education around pensions could ensure they understand the benefits.
Could you increase your own pension contributions beyond the statutory minimum or match your staff’s pension contributions to encourage pension savings?
5. Don’t preach – get the experts in
No business wants to risk offering poor or wrong financial advice to staff or appearing patronising. Instead, consider introducing experts, such as financial coaches, to offer guidance about effective saving and budgeting and encourage positive relationships with money. This may also appeal to staff who would rather not speak directly to their employer about the issue.
In partnership with Claro Wellbeing
A financial wellbeing benefit to support your team where it matters most