13 Nov 2024

Supporting financial wellbeing in times of uncertainty

An unexpected change in finances often leads to an uncertain future and that can be disruptive for employees and their employers.

Uncertainty is a common feature of life, sometimes resulting from decisions we take ourselves or changes in the workplace, and sometimes by external circumstances such as changes in legislation and the economy.

And, coming so soon after the first Budget of the Labour government, it’s an apt topic for discussion for employers and employees.

When it comes to money, an uncertain future can be worrying.

It can throw out usual financial behaviours and cause people to withdraw or bury their heads in the sand.

Many people may need to revisit their budgets and change their spending.

Some may need to rearrange existing debt, incur more debt, change their savings plans or rely on emergency savings.

So can employers and individuals reduce the strain on financial wellbeing?

Simple first steps

Identify those that may be affected and also those that definitely won’t be as soon as possible. This not only reduces the population of workers that experience the uncertainty but also adds a raft of allies in those not affected.
Be clear about the expected timelines – when planning a change to finances, it’s essential to know the likely timing and duration of the uncertainty.
Provide details of the changes, the choices available and when decisions are needed.
Signpost the resources, help and support available so employees can plan accordingly.

Also, when uncertainty arises from both inside and outside the workplace, there are some other key steps to consider.

Ensure that you communicate relevant financial benefits.

For example, in times of uncertainty, some people may want to review additional protection benefits like income protection and critical illness cover.
What does your financial wellbeing programme offer to support those with debt?
Do you offer hardship loans, salary advances or workplace loans; and is debt counselling available via your employee assistance programme?
Also, remind employees of the workplace benefits available to reduce everyday living costs such as shopping discount schemes or a mortgage advice service.

Some employees may need to make changes to workplace savings plans as a short-term stopgap to help carry them through the period of financial uncertainty.

Savings in share save plans can be accessed at any time and pension contributions can be reduced or even paused for a time.

However, it’s vital employees seek guidance before carrying out any of these steps and after understanding the implications of what’s being given up so they can make a supported and well-informed decision.

Investigate alternative support

If you have a financial wellbeing provider ask them what additional support they can offer.

Providers that deliver a holistic financial wellbeing programme, that addresses all workplace benefits and all areas of personal finance, will be best equipped to provide support.

For example, they could deliver a dedicated webinar looking at how to manage financial uncertainty.

They could provide a fact sheet/guide or case study on the changes and the options available and ensure there are links to suitable budgeting tools and savings and pensions modellers, so employees can see the impact of any planned changes.

In addition, consider what 1-1 support you can arrange or signpost for employees.

For workplace exercises such as restructures, pension closures and divestments, a programme of live seminars/webinars and 1-1 financial guidance clinics can introduce an independent voice into the process; raise financial awareness of the changes and provide 1-1 guidance for those that need it.

For wider economic uncertainty, point employees to any 1-1 financial guidance, coaching or advice services your financial wellbeing provider offers and reference third parties like debt charities and citizen’s advice.

Help is always available

While individuals may not be able to change the circumstances causing the uncertainty, there are many things they can do to reposition their personal budgets and to bolster their financial resilience measures so they are better able to weather a difficult period.

Every employee needs to be reminded that there is help available and there’s always something that can be done to take their finances to a better place and reduce money worries.

And most importantly, employees don’t need to do it alone.

They can talk to their employer, seek help from their financial wellbeing provider, financial coach or financial adviser, with counsellors within their EAP and external charities such as Citizens Advice, National Debtline, StepChange, Money Helper and Samaritans.

Find out more about how our financial wellbeing services can help support your organisation.