Planned rise in spending offers a brighter future for financial wellbeing, says Jonathan Watts-Lay

More employers are addressing financial wellbeing, but a joined up strategy is still an ambition for many, says Jonathan Watts-Lay, Director at WEALTH at work

Now we are in our second year of the Financial Wellbeing Research, it’s encouraging to see that almost all those employers surveyed view financial wellbeing as an integral part of improving wider employee wellbeing. Not only is it important for increasing engagement, but it is also linked to other HR objectives such as recruiting and retaining employees.

However, whilst employers offer various financial wellbeing benefits and services, many acknowledge that these are not part of a joined-up strategy, which has likely occurred due to reacting to employee needs during the cost-of-living crisis. But it’s good to see many employers plan to join them up in the future.

The tools to better manage money

Our research highlights that employers expect financial pressures such as high childcare costs, rental costs, high consumer inflation and energy prices will continue to be a risk. To combat this, 53% will increase financial wellbeing spend.

It’s also clear that a lack of financial literacy is seen as a major risk, and financial distress in the workplace is set to be a driver of change in the future. Additionally, the ageing workforce is having an increasingly important effect on financial wellbeing strategy, with targeted support for the over-55s set for significant growth. This is especially important for those considering accessing their pension early.

It is good to see that employers’ focus has now shifted to helping employees by providing them with tools to better manage their money. Support is growing for savings products to build financial resilience, such as employee share plans, pay as you earn saving schemes (help-to-save and opt-in payroll savings), long-term incentive plans and tax-free saving wrappers (ISAs).

However, it is concerning that wage advance schemes are rising in popularity. While they may be suitable to help with an emergency cost such as urgent car repairs, they are not a long term solution to financial problems. They should always be offered alongside financial education, so that employees understand this.

Of course, financial education is the key element that underpins all financial wellbeing initiatives. After all, financial wellbeing is about being able to make informed choices about your finances.

Financial wellbeing for all

The good news is that the number of employers planning to offer financial education from an independent provider, financial guidance or financial advice is increasing. In fact, financial coaching is set for significant growth. This could be because employers now recognise that in some instances, employees need one-to-one support.

This support should help employees better manage their finances, including: how to manage a budget, debt, save for life events, and eventually, how to prepare for retirement.

However, for any financial wellbeing programme to be successful, it’s important that these services are accessible to all – and most importantly – employees should understand what support is available, as well as how to access it and make the most of it.