Almost two-fifths (37%) of employer respondents that have no plans to implement a financial wellbeing strategy for staff state that this is because it is not a priority, according to research by Close Brothers Asset Management.
Its Financial wellbeing index 2019 report, which surveyed 1,003 employers with 200 or more staff and 5,003 employees from organisations with 200 or more staff, also found that of those employers that do not plan to implement a financial wellbeing strategy, 26% do not have the budget and 24% do not see the value.
Jeanette Makings (pictured), head of financial education at Close Brothers Asset Management, said: “Money worries don’t just affect an individual’s financial health; they are one of the single biggest causes of stress, impacting mental and physical health if left unchecked. They are also an issue for businesses with lower productivity, higher absenteeism and higher staff costs, which hurts business performance. Doing nothing is no longer an option.”
Currently, employers offer their staff retirement planning seminars (28%), employee assistance programmes (EAPs) (26%) and discount vouchers (20%) in order to help improve their finances. Respondents stated that their primary drivers include improving employee engagement (35%), providing a valued employee benefit (32%) or adding to their overall people strategy (32%). Around 28% said that improving employees’ financial wellbeing was their main motivator, while 25% launched a financial wellbeing strategy in order to reduce employees’ stress and improve mental health.
Approximately half (48%) of employer respondents do not have a financial wellbeing strategy, although 27% plan to implement one within the next three years. Those employers that do offer a financial wellbeing approach state it helps bolster productivity (30%), assists with talent attraction and retention (24%) and fulfils strategic business objectives (22%).
“Employers are perfectly placed to play a significant role in making a difference to the UK’s financial health,” added Makings. “Employers can reach large numbers of people with communications that are trusted and [they] can procure benefits and financial education, advice and investment solutions to help their employees improve their financial wellbeing. Yet, despite the growing awareness of the need for workplace financial wellbeing, organisations seem to be struggling to find clarity, transparency and meaningful measurement on this issue.”
Almost a third (30%) of employee respondents feel that their employer is not helpful when it comes to improving their financial wellbeing, with a further 27% believing that what is provided to them is of little benefit. However, the top benefits offered to staff, after reward and pensions, are discount vouchers for lifestyle expenditures (17%), financial advice (13%), retirement seminars (12%), EAPs (12%) and workplace loans (6%).
More than three-quarters (77%) of employees state that money worries impact them at work, but 55% say that their workplace offers them nothing to improve their situation. More than a third (36%) feel unprepared for their retirement, for example, with only 43% confident that they will be able to retire at the age they want. A quarter (24%) have a pension that they never review, and a further 24% expect to have to work in retirement. Only 8% have purchased an income protection product.
Almost a third (31%) of employees define their top money worry as funding their retirement. This compares to 27% who label paying off debt as their biggest concern, 23% who are worried about coping financially if they see a reduction in household income, 19% who experience stress about making their wages last until payday, and 19% who are concerned about the state of the economy in general.
Makings concludes: “Financial wellbeing is incredibly personal and affects each of us differently; not only because of our financial circumstances but also because of our attitude to both money and stress. For the right outcome, providing education and advice to address all seven areas of financial health and for all employee groups will deliver tangible results for both individuals and businesses alike.”