Financial coaching is increasingly recognised as crucial for employees’ financial well-being.
- A growing number of employers plan to introduce financial coaching services.
- Financial coaching helps employees adopt positive savings habits.
- It plays a vital role in preparing employees for retirement.
- Financial coaching encourages employees to take proactive financial steps.
Over recent years, the concept of financial coaching has gained significant traction as a method to enhance the financial well-being of employees. This service provides personalised financial education and guidance, empowering individuals to feel more confident in managing their money and making informed financial decisions. Financial coaching in the workplace is on the rise, with 12% of employers offering it presently and 41% planning to adopt it in the coming years, marking a substantial 241% increase.
A key benefit of financial coaching is the promotion of positive savings habits among employees. Building new financial habits can be challenging, but a financial coach assists employees in managing budgets and establishing sustainable money habits. Through guidance, they help employees recognise and amend unhelpful patterns, reinforcing positive behaviours that lead to more mindful spending.
Moreover, financial coaches play an instrumental role in helping employees develop a comprehensive financial plan. Many employees find it difficult to prioritise saving for emergencies or retirement. By elucidating the significance of an emergency fund and demonstrating its feasibility, financial coaches make it attainable, enhancing employee resilience against unexpected financial setbacks. They also detail how small, consistent savings or pension contributions can grow substantially over time, aiding long-term financial goals such as homeownership.
Preparing for retirement is another critical aspect addressed by financial coaches. Research indicates that 33% of employees fear they may never afford to retire due to rising costs. Financial coaches provide essential insights into making retirement a feasible goal, helping employees explore all available options to ensure a secure future.
Financial coaching also inspires employees to take decisive actions concerning their finances. By understanding their financial situation better, employees can make informed decisions such as increasing pension contributions, reducing debt, or saving on taxes. Coaches can direct employees towards regulated advice when necessary, facilitating a deeper understanding of complex financial matters. Jonathan Watts-Lay, Director at WEALTH at work, observes, “An increasing number of employers are now turning to specialist workplace financial wellbeing service providers to help individuals build their financial knowledge and improve their financial wellbeing throughout their career. Taking an active approach and supporting employees by providing financial education and guidance through financial coaches, can in turn lead to a more financially resilient workforce, which is a win win for all!”
Financial coaching is a valuable investment for both employees and employers, fostering a financially resilient and informed workforce.
