Financial pressure is spilling over into the workplace, according to new research of 2,000 workers by WEALTH at work[1]. Employees admit that money worries affect their performance at work by causing increased stress levels (36%) and mental exhaustion (34%).
These pressures are also having a tangible impact on productivity. Almost a quarter of workers (23%) say financial worries have led to decreased motivation, one in five (20%) report reduced focus and concentration, and 8% say money‑related stress has contributed to increased sick days.
Despite this, the research shows that 30% of workers do not seek help from anywhere in particular when managing their money, while 29% rely primarily on friends or family. Only 10% speak to a financial adviser, and just 2% approach their employer for support. In fact, 45% reported that they feel unsupported by their employer when it comes to understanding their finances, rising from 39% a year ago.
Financial coaching, delivered through financial education and guidance, can be a powerful tool to help employees overcome money worries and get on track with their finances. Our research with the Reward & Employee Benefits Association (REBA)[2] found that 40% of employers either already offer, or plan to offer, financial coaching in the future.
WEALTH at work outlines 4 key ways that a financial coach can help employees improve their finances:
1. Building positive savings habits
Building new habits can be difficult, especially when it comes to money. A financial coach can help employees navigate challenges such as managing a budget and help them establish and stick to positive money habits. A financial coach helps employees recognise unhelpful patterns and reinforces positive savings habits and enables them to be more considered about spending.
2. Putting a financial plan together
It has always been a challenge to convince employees why they should consider putting aside money for an emergency or engage in their pension. Not only can a financial coach explain the value of an emergency fund, but they can also show how achievable it is to set up and how it will build financial resilience for unexpected events, for example, if the car breaks down or they face redundancy. A financial coach can also explain how small savings or pension contributions can compound over time, and how this can grow and help people meet future goals such as buying a house.
3. Preparing for retirement
One of the most crucial elements of employee financial wellbeing is retirement preparation. Our research[3] found 45% of employees think they won’t ever be able to afford to retire due to increasing costs. A financial coach can help employees understand how to make retirement affordable and achievable. Not only this, but financial coaches can also help employees realise all the options available to them at the point of retirement.
4. Driving action
Speaking to a financial coach can help people get a firmer understanding of their situation, so that they can then take steps to improve it. This could include increasing pension contributions, reducing debt, saving tax or utilising workplace savings such as ISAs. A financial coach can also be a gateway to investment advice for those who would benefit from it, as they can help employees recognise all the complex things they need to understand about their finances. In doing so, they may then realise that they need specialist advice.
Jonathan Watts-Lay, Director, WEALTH at work comments:
“An increasing number of employers are now turning to specialist workplace financial wellbeing service providers to help individuals build their financial knowledge and improve their financial wellbeing throughout their career. Taking an active approach and supporting employees by providing financial education and guidance through financial coaches, can in turn lead to a more financially resilient workforce, which is a win-win for all.”
[1] https://wealthatwork.co.uk/news/article/new-research-reveals-rising-money-struggles
[2] https://wealthatwork.co.uk/news/article/the-future-of-financial-wellbeing-provision
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