Improving employee financial resilience with employee benefits
Employers expect employees to continue to face financial pressures such as high childcare costs (64%), home rental costs (66%), high consumer inflation (75%) and energy prices (77%), according to a survey that looks at risks to employee financial wellbeing.
It says also many workplaces are increasingly recognising poor financial literacy as a key financial wellbeing risk, with almost two-thirds (63%) considering it as a risk to most of their workforce, up from 58% in 2022.
The Financial Wellbeing Research 2023, published by the Reward & Employee Benefits Association (REBA) in association with WEALTH at work, details the wide-ranging workplace support that employers can offer as part of a joined-up financial wellbeing strategy to help manage the risks adversely impacting employees’ financial wellbeing.
Only 19% of employers plan to offer increased pay in line with inflation in the next two years, according to the survey. Instead, 53% say they will increase their financial wellbeing spending, to providing employees with the knowledge and tools to manage their finances better.
In fact, the number of employers offering independent financial education, guidance and advice is also set to almost double. Financial education by an independent provider (62%), financial guidance (67%), advice on general finances (56%), or advice specific to retirement (60%), are all either being offered by employers or are planned to be offered in the next two years.
In particular, financial coaching is set for significant growth – 12% of employers offer it but 41% plan to within the next couple of years – a 241% increase.
Additionally, the research found that support is growing for savings products. Employers offer, or plan to offer in the next two years, pay-as-you-earn saving schemes such as help-to-save and opt-in payroll savings (34%), employee share plans (42%), tax-free saving wrappers including ISAs (45%), and long-term incentive plans (54%).
Jonathan Watts-Lay, Director, WEALTH at work says:
“Money worries can have a detrimental impact on people’s home and work life. So, it’s good to see that employers are focusing on providing employees with the tools to better manage their finances.
“Many leading companies provide employees with financial education and guidance by financial coaches, which can help address gaps in financial literacy. Also, offering a range of savings products such as a Corporate ISA or employee share plans can help to build financial resilience.”
He added: “However, it is important to ensure that employees are aware of all the financial wellbeing benefits on offer, how to access them and how they can use them to their advantage.
“This is why financial education and guidance in the workplace is so important as it not only can it help develop understanding and encourage engagement with the benefits on offer, but it’s also a catalyst for behavioural change and action.”
In partnership with WEALTH at work
WEALTH at work is a leading financial wellbeing and retirement specialist - helping those in the workplace to improve their financial future.
