How has the pandemic impacted employers’ financial education strategies?

Need to know:

  • Over half of UK employees worry about money at least once a week, and people’s mental health is suffering.
  • The pandemic has heightened the financial stress people were already experiencing. Their priorities have shifted away from day-to-day financials and towards a need for emotionally-driven financial education.
  • Although face-to-face support is less accessible, there is a lot of support available online. Financial education providers have pivoted to online formats such as webinars, although some subjects are still easier to talk about face to face.

The Covid-19 pandemic has not just threatened physical health. The looming spectres of redundancy, furlough and pay cuts have created a great deal of anxiety among UK employees.

Over half (52%) of UK workers admit to worrying about money at least once a week and 18% do so every day, according to the Elephant in the workplace research by financial education provider Nudge, which was carried out among just over 2,000 UK employees in July/August 2020. A quarter of those who are worrying about money said that their mental health has suffered as a consequence.

With the financial stresses the pandemic has created, financial education has never been more important. Three-quarters of HR and reward professionals feel comfortable talking about financial wellbeing and 70% believe it is their responsibility to help, according to Nudge’s research. However, this sentiment is not necessarily shared at all levels. The vast majority (88%) of HR and reward professionals believe their board could provide better support on driving financial wellbeing at work.

Even if senior leaders do not buy into a paternalistic philosophy, they might be more persuaded by evidence that so much anxiety is leading to less productivity. People with poor financial wellbeing are seven times more likely to be unproductive and eight times more likely to produce lower quality work, according to Nudge.

The pandemic has challenged concerned employers to shift their delivery mechanisms. They must also refocus their content to make sure their message is resonating with as many people as possible.

Virtual is the new normal

Just as virtual meetings have replaced their face-to-face equivalent, employers have embraced webinars. In the summer as some people returned to work, employers were wavering as to whether webinars were the right way forward, says Sarah Steel, director of financial education firm Better with Money.  “The moment [prime minister] Boris [Johnson] put us back into lockdown, [organisations] decided the webinar trend was going to carry on,” says Steel. “More and more employers have programmes in place for 2021. People have decided: it’s here to stay, it is working.”

Tim Perkins, co-founder of Nudge, adds: “We have never been busier. The health crisis has become a financial crisis and the already complicated world of money has been turned upside down. Employers recognise they are in a unique position to support their people in the UK and beyond, as well as the communities beyond their workforce.”

Delivering a memorable webinar has been an iterative process, says Jonathan Watts-Lay, a director at financial education provider Wealth at Work. For example, pre-retirement courses used to range from a minimum of three hours to a full-day event. “[We] can’t deliver a full-day event online, it’s too long. So, then [we] get into what content, and how do we condense it into a maximum of two and a half hours?”

Watts-Lay estimates 90% of content was delivered face to face and 10% digitally before the pandemic. He predicts it will move to more of a 50/50 model in future. Some subjects work better digitally than others. For instance, debt can be condensed into more manageable chunks than retirement, says Watts-Lay.

What do people want to know?

Practical help with the day-to-day issues people are facing has been much appreciated. Steel filmed a Covid-19 webinar at the start of lockdown, covering subjects like the support available from different places, such as the government, employers, mortgage lenders and credit card providers.

Iterations of that webinar have gone from strength to strength, says Steel. “A lot of the [organisations] still running it haven’t furloughed anyone, but they are very aware that family incomes have dropped, so irrespective, they want to support the wider family.”

Nick Throp, co-founder of communications agency Like Minds, adds: “There was a recognition among organisations that they were dealing with a whole individual. Even [employers] which kept people on and continued to pay them realised that their partner might have been furloughed or made redundant.”

People’s mindsets have shifted in the pandemic, according to data from Nudge. People’s priorities have shifted away from day-to-day financials and towards a need for, what Nudge terms, emotionally-driven financial education. Sadly, divorce and separation soared by 518% as a search term among Nudge’s 500,000-strong community base. Online scams also increased vastly, by 738%. More encouragingly, interest in investing saw a sharp uptick of 305%.

Hope may be on the horizon in the form of a vaccine, but financial wellbeing should stay high on employers’ agendas. With Christmas coming up, there is a very understandable temptation there to have extravagant celebrations after a difficult year. But a credit card Christmas will only fuel the January blues.

The good news is that employers are committed to helping. As Steel says: “At the start of the pandemic, there were a lot of arrangements employers had to make from an infrastructure point of view. They have got all of that sorted so now they have more headspace to think about communications and areas such as financial wellbeing.”