A practical approach to financial wellbeing.


Jonathan Watts-Lay, Director, WEALTH at work, answers questions from Reward.

Reward: Payroll, pensions and Employee Assistance Programmes (EAPs) can be rich sources of information about financial wellbeing trends in the workplace – but very few people in our survey are using these.  What are the barriers to making the most of this data, and how can they be overcome? 

Jonathan Watts-Lay (JWL): When we start working with a company, one of the first things that we do is use data, for example from the HR and benefits database to help us segment the workforce and better understand their needs.  Data really is the starting point, and it’s difficult to put effective financial education in place without it.  Sometimes there are constraints, and the information available won’t cover everything, but it is crucial.

Sources of data might be systems such as an EAP which can give some valuable anonymised pointers about financial worries in the workplace. Provided your systems providers offer good quality management information tools, there should be few barriers to using these sources of information.  That can then be combined with information that you’ve proactively asked your employees about, to give a richer picture.

Reward: While auto-enrolment has meant all employers will now offer a pension, use of other savings schemes such as Save As You Earn are still relatively low.  How can employees be encouraged to use them?

JWL: Encouraging employees to think about short, medium and long-term savings goals can really help with this.  In the short term, someone might be interested in saving for a car or a wedding, for example. In the medium term, their focus might be on school fees or a home deposit over a five to 15 year period.  Longer term savings are typically about retirement savings.

Matching those goals up to what’s on offer in the workplace is the next step. For example, putting money into a Save As You Earn scheme can help fulfil short-term goals.  If there’s a Share Incentive Plan, that can be a beneficial way of saving for the long term.

While it’s tempting to encourage people to divide up what they can save each month and allocate a certain amount to short, medium and long-term goals, that might not work for everyone’s priorities. Making sure staff have really thought about what they want to achieve and that they are using the right savings options to achieve that is really important.

Helping employees to reassess their priorities once they’ve achieved a savings goal will help to make sure that they stay on track for medium and long-term goals as well as the short term.

Reward: How can employers be encouraged to offer financial education, guidance or advice?

JWL: I think more companies are doing this, but it is larger businesses, rather than SMEs. Sometimes businesses of all sizes don’t think this is their problem – but there is increasing recognition that worrying about money affects day-to-day productivity as well as long term plans such as retirement.

We are seeing much more interest in supporting the 50-plus age group with financial education, guidance and advice as employers are beginning to become more concerned about their staff’s ability to retire and an ageing workforce.

However, planning for retirement is something that can start much earlier as well. Helping employees to see how seemingly unconnected activities are interlinked, such as shopping around for insurance and utility providers and paying savings made into a pension, is a key part of good financial education. Spending less on everyday bills frees up money to save into a pension. Then, taking advantage of matching pension contributions from the employer and associated tax relief could mean that small changes to everyday money management add up to considerably better savings in the long term.

To read the full article in Reward, please click here.

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