The Reward & Employee Benefits Association (REBA) in association with WEALTH at work has launched the second in its series of workplace research – Financial Wellbeing Research 2023*, with responses from almost 200 companies representing over 1.5 million employees.
Risks to financial wellbeing
It found that many workplaces are increasingly recognising poor financial literacy as a key financial wellbeing risk (63% compared to 58% in 2022 research**).
Employers also expect financial pressures such as high childcare costs (64%), rental costs (66%), high consumer inflation (75%) and energy prices (77%) will continue to be a risk to the financial wellbeing of their staff. Albeit, energy costs and consumer inflation are notably less of a concern than last year (91% reported high energy prices and 81% reported consumer inflation as risks in 2022).
Instead, 53% of respondents say they will increase financial wellbeing spend.
The survey also found that employers view the ageing workforce as increasingly important, with 29% citing that it will be a driver of financial wellbeing strategy over the next two years. 44% say that they plan to offer targeted support for the over 55s during the same period – which has grown from 17% and represents a 159% increase in the past two years. Specifically, pre-retirement planning is set for a 68% boost with of employers either currently offering or planning to do so. These findings may be due to concerns over eligible employees accessing their pension early, as 17% of employers reported that this will also be a driver of future change.
Another notable focus for employers will be tackling financial distress in the workplace. The survey found that 44% say that it will be a driver of change in the next two years.
Jonathan Watts-Lay, Director, WEALTH at work, comments; “As employees continue to feel the impact of rising costs, supporting employees with day-to-day needs should be the immediate focus, alongside providing support around longer-term needs such as savings, pensions and preparing for retirement, especially for those considering accessing their pension early.”
He adds; “It’s well known that when individuals do not fully understand their finances and how to address current difficulties and mitigate potential risks, it can result in stress. A lack of understanding of their finances could also result in employees making poor decisions which can prove very costly, especially at retirement. Helping employees to understand the key financial issues that relate to them is an effective way of overcoming the risks of poor financial literacy.”