The Financial Wellbeing Research 2023[1], published by the Reward & Employee Benefits Association (REBA) in association with WEALTH at work, details the wide-ranging workplace support that employers can offer as part of a joined-up financial wellbeing strategy to help manage the risks adversely impacting employees’ financial wellbeing.
The survey uncovered risks to financial wellbeing that employers expect employees to face including financial pressures such as high childcare costs (64%), rental costs (66%), high consumer inflation (75%) and energy prices (77%). Coupled with this, many workplaces are increasingly recognising poor financial literacy as a key financial wellbeing risk, with almost two-thirds (63%) considering it as a risk to the majority of their workforce, up from 58% in 2022.
Only 19% of employers plan to offer increased pay in line with inflation in the next two years. Instead, 53% say they will increase financial wellbeing spend, and it seems the focus has now shifted to providing employees with the knowledge and tools to manage their finances better. In fact, the number of employers offering independent financial education, guidance, and advice is also set to almost double. Employers offer or plan to offer in the next two years, financial education from an independent provider (62%), financial guidance (67%), and advice on general finances (56%), or advice specific to retirement (60%). In particular, 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.
Additionally, the research found that support is growing for savings products. Employers offer or plan to offer in the next two years, pay as you earn saving schemes such as help-to-save and opt-in payroll savings (34%), employee share plans (42%), tax free saving wrappers including ISAs (45%), and long-term incentive plans (54%).
Jonathan Watts-Lay, Director, WEALTH at work comments;
“Money worries can have a detrimental impact on people’s home and work life. So, it’s good to see that employers are focusing on providing employees with the tools to better manage their finances. Many leading companies now provide employees with financial education and guidance from financial coaches which can help them to address gaps in financial literacy. Also, offering a range of savings products such as a Corporate ISA or employee share plans can help to build financial resilience. However, it is important to ensure that employees are aware of all the financial wellbeing benefits on offer, how to access them and how they can use them to their advantage. This is why financial education and guidance in the workplace is so important as it can not only help develop understanding and encourage engagement with the benefits on offer, but it’s also a catalyst for behavioural change and action.”
[1] The REBA Employee Financial Wellbeing Survey 2023 was carried out online between March and May 2023 and was launched on 26 September 2023. Responses were received from 195 wellbeing, HR and employee benefits specialists working at organisations representing over 1.5 million employees and is available here: https://www.wealthatwork.co.uk/corporate/2023/09/26/financial-wellbeing-research-2023-creating-structured-approach-financial-benefits/