Employers looking to expand financial wellbeing support

Employers in the UK are planning to expand their financial wellbeing provision in the wake of Covid-19, new research has found.

Financial wellbeing relates to how people feel about their relationship with money and their financial future. By providing access to information and advice on budgeting and dealing with debt as well as insurance, loans, short-term savings, housing and retirement savings, financial wellbeing initiatives in the workplace can help employees make better financial decisions and reduce their money worries.

Nearly half of employers currently have a financial wellbeing policy in place, but many now recognise that they need to offer a broader range of financial education and support, according to research by Willis Towers Watson.

Over a third (36%) of employers believe the Covid-19 pandemic has had a negative impact on the financial wellbeing of their employees, and three-quarters (76%) believe their employees want them to take a more active role in supporting their financial wellbeing.

When it comes to retirement savings, nearly half of companies (47%) acknowledge that their employees face challenges, but more than six in ten (61%) are confident their retirement savings provision is effective.

Meanwhile, emergency savings and day-to-day costs and debt are identified as challenging areas for employees that are not adequately supported at the moment.

"Organisations realise employees are currently facing a wider array of financial challenges and are looking to evolve from a focus on helping employees save for retirement, to adopt broader financial wellbeing programmes that provide the help they need," said Richard Sweetman, financial wellbeing lead at Willis Towers Watson. "Many employers are now accelerating their focus on financial wellbeing in response to Covid-19, and the associated economic impacts."

Looking ahead, half of employers intend to provide better emergency savings support over the next two years and a similar number recognise the importance of debt and day-to-day costs support.

"Debt and the ability for employees to make ends meet should be a particularly important area for employers to focus on, with almost a quarter of employees seemingly affected," Sweetman said. "We know from employee research that when these issues do come up, they have a particularly detrimental impact on mental health and wellbeing."

This increased focus on broader financial wellbeing is unlikely to come at the expense of pension provision as four in five (79%) employers also recognise the importance of greater support for retirement savings.

However, simply providing more options to employees is unlikely to be successful without effective communication and decision support, Sweetman added.

"A well-structured financial wellbeing programme will not just provide tools and apps but also coaching, seminars and guidance for employees, to help them make better financial choices. To be most effective, programmes need to relate to individuals' circumstances and be communicated at moments in time most relevant to the employee."