Why now is the time to strengthen financial wellbeing
Factors such as cost of living pressures, ongoing retirement adequacy concerns and employee expectations are shaping employers' thinking about financial wellbeing benefits, creating both challenges and real opportunities for change.
Drawing on insights from REBA’s research and guides library, we look at how employers can address financial wellbeing issues.
An increase in financial wellbeing inequality
Employee financial wellbeing in the UK has fallen for the first time, according to Stream’s The State of Financial Wellbeing 2025 report. It shows a decline in its FinWell Index baseline score from 100 in 2024 to 99.1 in 2025.
The findings highlight how demographics play a role in financial wellbeing and, therefore, what support might be required to address widening inequalities by gender and age.
In the report, women’s overall financial wellbeing scores dropped from 97.9 to 95.8. The gender gap has widened from 5.2 points in 2024 to 6.7 points in 2025, which highlights a 29% increase in financial wellbeing inequality.
It also shows that young people (18-24) have the lowest score of any age group (87.7), while those aged 75 and older score 30 points higher (117.7).
Addressing financial inclusion is one of the key themes in REBA’s annual Financial Wellbeing Survey which aims to explore how employers can ensure greater inclusivity and support financial resilience.
Current support is not effective enough
Financial wellbeing benefits are no longer a “nice-to-have” – they’re becoming a strategic tool for businesses to attract, retain and support their people. Yet employers are failing to realise the value of these benefits.
Gallagher’s 2025-2026 Workforce Trends Report found that more than a third (39%) of organisations offer financial support and access to an advice tool via online apps and solutions.
However, less than one in ten (6%) said they found this support very effective, while under half (47%) of the employer respondents said they felt the financial wellbeing support offered was quite effective. More than two-fifths (42%) said it was not very effective.
The report concluded: “These results suggest significant room for improvement in how financial education is designed and delivered.”
Pension schemes lack reviews
When it comes to reviewing and updating financial wellbeing benefits, employers need to make improvements now to support their people for future financial resilience.
Pension reviews remain essential to ensure schemes meet employees' needs and remain competitive.
Everywhen’s 2026 Strategic insights into workforce wellbeing and employee benefits report highlighted that a significant minority of employers may not be keeping up with best practice to improve pension scheme performance.
Although half of employers (48%) said they have reviewed their workplace pension scheme to check if it offers value for money in the past 12 months. A further 35% said they have reviewed it within the last three years, and one in 10 admit to having never reviewed their scheme.
The report also showed that, despite the advantages of salary sacrifice pension schemes, less than half of employers (48%) currently offer salary sacrifice for pensions.
Ensuring value for money is essential to helping employees to generate an adequate retirement income. It is also a key part of Financial Conduct Authority’s Value for Money Framework which, once introduced, will require employers and providers to play closer attention to pension performance.
The UK pension adequacy gap
More than 10 years after automatic enrolment was introduced, many employees with defined contribution pensions still face the risk of inadequate pension savings.
Royal London’s Higher auto enrolment contributions, pension adequacy and economic outcomes report (2026) assesses how increasing minimum default contributions could enhance pension adequacy and impact the UK economy.
The report found that many UK workers are at risk of insufficient pension savings even with auto-enrolment.
Just one-third (36%) of people with a defined contribution (DC) pension are projected to meet Target Replacement Rates (TRR) by 2040, and just over a quarter (26%) are expected to reach the moderate Retirement Living Standards threshold.
If employer and employee contributions both rise to 7% (14% in total), this raises the share of households achieving adequacy by around 5 percentage points in 2040. The report suggests that to address the UK’s pension adequacy gap, there is a need for a phased, long-term plan to increase minimum contribution levels over time.
Supplied by REBA Associate Member, REBA
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