Over the past few years, financial coaching has emerged as a powerful service which helps improve employee financial wellbeing. It is designed to offer bespoke financial education and guidance to help people feel more confident with their money and make smarter financial decisions.
In fact, workplace financial coaching is set for significant growth – 12% of employers currently offer it but 41% plan to within the next couple of years – a 241% increase. But what are the real benefits?
WEALTH at work outlines 4 ways a financial coach can help your employees:
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 make employees more resilient for unexpected events, if say, 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 found 33% of employees think they won’t ever be able to afford to retire at all 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 or saving tax. A financial coach can also be a gateway to regulated 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!”