How financial inclusion is tied to the workplace and employee benefits

The aim of financial inclusion is to widen the net when it comes to understanding financial literacy and planning.

My 19-year-old daughter rolls her eyes when I talk to her again about the importance of financial planning.

Who can blame her? It doesn’t interest her, she loves illustration.

She has put up a wall, put fingers in her ears and is now shouting “lalala”.

Is that because she thinks it’s too complicated, too much like maths or because it’s her mum telling her what to do?

Is she one of the 12.5 million UK adults who have little or no confidence in their ability to manage money (Financial Inclusion Commission – Making financial inclusion a top political priority in the UK).

Does she need to be financial included?

What is financial inclusion?

The recently set up Financial Inclusion Committee’s mission is to tackle individual and household’s abilities to access affordable and appropriate financial products and services.

This feeds into the Treasury led National Financial inclusion Strategy.

The independent Financial Inclusion Commission is supportive of the National Financial Inclusion Strategy and confirms the five pillars of the strategy as:

Expanding access to face-to-face banking services and cash, including sustainable banking hubs.
Improving access to affordable, well-regulated credit, supporting community lenders and innovation in credit scoring.
Promoting savings through workplace-based schemes, digital platforms, and incentives.
Enhancing access to affordable insurance to build household resilience against financial shocks.
Increasing access to free debt advice and money guidance.

Currently the focus in financial services tends to be on the mass market with homogenous needs and wants.

But these services should also think about the groups most needing financial support (but perhaps also the least likely to ask for it or know how to obtain support), such as low-income earners, gig economy workers, those with disabilities, minority ethnic groups, young adults (like my daughter), and older adults.

These groups are more likely to have increased debt, stress, reduced productivity, and suffer from social inequality.

Financial literacy is key to financial inclusion.

A basic understanding of finances can give confidence and is a step towards take ownership of the more complicated aspects of financial life.

How does this link with employee and workplace benefits?

Employers have a direct line to employees and can tackle financial inclusion by considering the following when building benefits packages.

Financial education and guidance:

Financial education workshops
Simplifying pension jargon
On-site workshops or webinars
Access to independent financial advisors
Tools and resources for budgeting and debt management
Personalised financial planning tools

Pensions and retirement planning, by using auto-enrolment as a foundation, and enhancing employer contributions.

Provide savings and credit options, through payroll savings schemes, ethical loan programs and credit unions.

Provide protection through income protection insurance, offering critical illness cover and life insurance.

General employee wellbeing offerings like employee assistance programs (EAPs) which include financial counselling and debt advice.

What specific actions can employers take to help?

Identify the specific needs of your workforce and set up a tailored financial inclusion strategy aligning with company values and employee demographics.
Provide ways for all employees to access financial information and learning. Are they happy to use technology? Or would they prefer regular webinars from experts or relaxed chats with colleagues?
Consider a partnership with a financial services provider, as they may offer access to affordable and ethical products and provide educational support.
Communicate available benefits effectively using clear and accessible language.
Provide ongoing training and support for managers, equipping them to recognise and address financial wellbeing issues. Have financial health first aiders in the company.
Measure and evaluate the impact of initiatives and adapt these as employee needs change.
Consider using technology to deliver financial education and tools which offer immediate support.

Why should the employer pick this up?

Financial inclusion should be a priority consideration for employers when building employee benefits strategies, especially in this current economic climate, with the cost of living increasing.

A financially inclusive workplace can lead to increased employee engagement and retention as well as reducing absenteeism.

A feeling that the employer cares leads to improved employee wellbeing and productivity, whilst enhancing employer brand and reputation.

Above all, know your employees, listen, and respond to their needs.