According to the company’s Future of Financial Wellbeing study, released today, three quarters (76%) of employers believe that their employees want them to take a more active role in supporting their financial wellbeing. While over a third (36%) believe that the pandemic has had a negative impact on the financial wellbeing of their employees.
The current state of financial wellbeing support
For retirement savings, nearly half of companies (47%) acknowledge that their employees face challenges, but nearly two-thirds (61%) are confident their retirement savings provision is effective. Emergency savings and day to day cost and debt are also identified as challenging areas for employees that are not adequately supported at the moment.
Richard Sweetman, financial wellbeing lead at Willis Towers Watson, said: “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. Many employers are now accelerating their focus on financial wellbeing in response to COVID-19, and the associated economic impacts.”
Looking ahead, employer priorities for change in the next two years better reflect the financial needs of their employees. Half intend to provide better emergency savings support and a similar number recognise the importance of debt and day-to-day costs support.
Crucially, the focus on broader financial wellbeing is unlikely to come at the expense of retirement provision as four-in-five (79%) employers recognise the importance of greater support for retirement savings over the next two years.
“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. We know from employee research that when these issues do come up, they have a particularly detrimental impact on mental health and wellbeing,” said Sweetman.
Where next for financial wellbeing?
The study also analyses the type of financial support currently offered by employers, and the areas of emerging focus.
Facilitating savings is an important area. General savings or investment accounts, corporate ISAs and Lifetime ISAs are currently offered by only a small number of employers but their importance is set to rise sharply over the next two years, with half of employers looking to introduce at least one additional type of workplace savings option within the next two years.
Financial education, guidance and advice is widely viewed by employers as an important part of their financial wellbeing provision. Online educational resources are already provided by over half of employers, with a further third likely to introduce it in the next two years.
Sweetman said: “With the importance of financial wellbeing in the workplace now acknowledged by most employers, the challenge organisations face is how to design and deliver a successful programme. Research on employee behaviour has shown that simply providing more options to employees is unlikely to be successful if it is not supported by effective communication and decision support.
“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.”
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