Zarah ChoudharyMore than half (53%) of employers said the increased cost of living will drive changes to future financial wellbeing support for employees, according to research by REBA and a financial wellbeing provider.
Two-fifths (40%) of employees believed money worries affected work performance by causing increased stress levels, with one in 10 saying it led to increased sick days.
Inflation was a concern for 76% of employers, while 73% cited costs impacting working parents such as childcare.
Rental costs are a concern for 64% of employers, as well as carer costs including eldercare (46%), high interest rates on mortgages (58%), and high energy prices (58%).
Insufficient retirement savings were also a significant concern (71%), and a lack of financial literacy (62%).
In response to these concerns, almost half of employers planned to make changes to their financial wellbeing offerings, and 35% said they will increase spend on financial wellbeing initiatives.
Employers focused on providing employees with the knowledge and tools to manage their finances better.
Specifically, they offered or planned to offer financial education from an independent provider (47%), financial coaching such as one-to-one guidance (43%), and advice on general finances (47%) as well as advice specific to retirement (54%).
Support with pre-retirement planning was offered or planned by 60% of employers.
Currently, about one in seven employers (14%) offer savings via tax-free wrappers such as a Workplace ISA, but this is set to more than double to 30% of employers in the future.
The research also found that employees would welcome such benefits, with 42% of workers saying they would save spare cash for a rainy day, such as in an ISA.
Jonathan Watts-Lay, director at WEALTH at work, said: “Money worries can have a detrimental impact on people’s home and work life.
“So, it’s good to see that employers are stepping up to provide employees with the tools and knowledge to better manage their finances.
“Many leading companies now provide employees with financial education and guidance from financial coaches which can help them to address gaps in financial literacy.
“It’s important to provide a range of learning methods.
“As well as in-person financial education, knowledge can also be supported through the creation of informative and stimulating content including webcasts, animations and interactive financial wellbeing platforms including Money&Me.”
Watts-Lay added: “Offering savings products such as a Workplace ISA are also important to help employees build financial resilience.
“This could be whether they are saving for the future or to create a fund for an emergency such as the car breaking down.
“But to boost engagement, it is important to ensure that employees are aware of all the financial wellbeing benefits on offer, how to access them and how they can use them to their advantage.
“This is why financial education in the workplace is so important as it can not only help develop understanding and encourage engagement with the benefits on offer, but it’s also a catalyst for behavioural change and action.”
