Recent research highlights the growing importance of financial wellbeing in the workplace.
- Employers are recognising financial education as crucial amidst rising living costs.
- A significant shift towards increased financial wellbeing spending is underway.
- Plans to expand independent financial education and guidance are prominent.
- Savings products are being integrated into employee benefits to foster resilience.
The Financial Wellbeing Research 2023, conducted by the Reward & Employee Benefits Association (REBA) in collaboration with WEALTH at work, underscores the critical need for comprehensive financial wellbeing strategies in the workplace. With rising costs in areas such as childcare, rent, and energy, employees are increasingly vulnerable to financial pressures. Employers are taking note of these challenges and are responding with a strategic focus on financial education and wellbeing programmes.
Despite the pressing issue of inflation, only 19% of employers intend to align wage increases with inflation over the next two years. Instead, 53% are choosing to channel their resources towards enhancing financial wellbeing support for employees. This shift emphasises the growing recognition that equipping employees with financial knowledge and tools can significantly aid in managing personal finances more effectively.
According to the research, there is a marked increase in the provision of independent financial education, guidance, and advice. Currently offered by a minority, these services are set to expand significantly, with 62% of employers planning to provide external financial education, 67% offering financial guidance, and 56% advising on general finances. Moreover, advice specific to retirement is projected for considerable growth, with plans rising to 60%.
The rise in financial literacy initiatives is further complemented by a considerable increase in financial coaching, which is predicted to expand by 241% within a couple of years. Financial coaching provides personalised guidance, which is instrumental in bridging the gap in financial literacy and promoting better financial decisions among employees.
Additionally, the integration of savings products into employee benefits is gaining momentum. Future offerings are set to include tax-efficient saving options such as ISAs, pay-as-you-earn savings schemes, and employee share plans. Employers recognise that these measures not only assist in building financial resilience but also encourage employees to engage more with their financial health. Employee awareness and understanding of these benefits are crucial for maximising their effectiveness.
A spokesperson stated, “Money worries can have a detrimental impact on people’s home and work lives. So, it’s good to see that employers are focusing on providing employees with the tools to better manage their finances.” The emphasis on financial education and guidance highlights its role as a catalyst for behavioural change, fostering a proactive approach to financial challenges.
In summary, the shift towards comprehensive financial wellbeing strategies in the workplace is essential for fostering a financially resilient workforce.
