In the current environment, it has become difficult for a lot of people to save as much as they would like, in fact, a survey[1] of working adults by WEALTH at work found that the biggest financial concerns for the year include not having enough savings for unexpected costs (40%) and not being able to save enough for the future (38%).
This can have a serious impact on financial resilience, with the weight of this financial burden spilling into the workplace. Almost two-fifths (38%) of workers admit that money worries affect their performance at work by causing increased stress levels, mental exhaustion (33%) and decreased motivation (26%). A fifth (20%) admit that it led to reduced focus and concentration, and almost one in ten (9%) say it led them to take more days off work unwell.
With this in mind, WEALTH at work has prepared the following tips for employers to help employees build their financial resilience.
Understand the needs of employees
Employees are likely to have different financial priorities depending on their life stage. For some the priority may be saving a deposit for a first home, whilst for others it might be saving for retirement, or for some it may be paying off debt. It’s important that employees put a plan in place on how to reach their goals and they may require support to do this. It therefore helps to design a programme which supports differing requirements.
Provide support on the basics
Many people struggle to understand basic financial issues and helping employees become more familiar with them, is an important step. For example, employees could start by reviewing their outgoings, everything from bills and subscriptions to food shopping and going out. Really looking at what is spent can often highlight areas that could be cut back on. A great example of this is insurance as it is often the case that someone would get a better quote by shopping around and using tools like comparison sites, but many neglect to do this.
Promote the employee benefits package
Employees should be encouraged to investigate the range of workplace benefits that may be available and suitable for them. Our research with REBA of almost 200 employers found that support is growing for saving products, with many workplaces set to offer pay as you earn saving schemes such as help-to-save and opt-in payroll savings, employee share plans and tax-free saving wrappers such as ISAs. Some employers will also match any additional pensions contributions that employees may not be aware of. For example, someone in their 20s can increase their pension pot by 25% by saving just 1% more if their employers were to match this. Making sure benefits are relevant and well-explained can really help take up and improve money management.