83% of employers to boost financial wellbeing support

financial wellbeing supportFour-in-five (83%) UK employers have planned to focus on employee financial wellbeing through enhanced communication, education and decision-making support over the next two years, according to Willis Towers Watson’s 2022 Defined contribution and savings survey.

The number of organisations with a formal financial wellbeing strategy, connected programmes, a consistent brand and an effective communication strategy, is expected to rise considerably from 17% currently to 94% within the next two years.

The majority of respondents (82%) said that saving for retirement is the main priority for their financial wellbeing support strategies, but many were looking to address budgeting, spending and debt (48%), short-term emergency savings (29%) and saving for house purchase deposits (23%). Meanwhile, 11% were allowing employees to use their employer pension contributions for other financial priorities, with 22% planning to introduce this flexibility in the next two years.

A further 82% were also focused on enhancing employees’ experience of their defined contribution (DC) savings plan through better communication and technology, while own trust DC schemes were most likely to move to a master trust (55%), compared with 24% of contract-based schemes in the next two years. More than a third (36%) have planned to review their existing DC plan arrangement or provider in the next two years.

Gemma Burrows, director at Willis Towers Watson, said: “In recent years we have seen employers take a much broader view of their employee experience and financial wellbeing strategy. Employers are acutely aware of the current cost-of-living crisis facing employees and many are adapting the way in which they offer benefits to introduce new flexibilities in order to address this.

“Contribution flexibility was once viewed solely as a mechanism to mitigate the impact of the annual allowance for higher earners but increasingly employers are looking at providing flexibility to employees and offering saving options, such as ISAs, that may be more relevant to individuals in the short and medium term.”