Steps to support financial wellbeing at work 

Financial wellbeing is increasingly seen as a key contributor to employee engagement and morale. Staff who have confidence in their full financial picture may experience lower levels of stress, higher company loyalty and improved productivity, allowing them to do their best work.

However, many UK households simply don’t know where to begin when it comes to achieving financial wellness. The pressure on household budgets has increased considerably during the recent cost of living crisis and the effects of this didn't stop at home. A 2022 report found nearly one in three workers (29%) had experienced a fall in productivity due to financial stress.

Additionally, all employers already invest in the financial stability of their staff – through salaries, of course, but also over the long term through workplace pensions. Many employers naturally wish to ensure that these investments deliver good outcomes, including by educating their staff to understand, appreciate and act on their financial wellbeing.

Finally, there is the paternalism factor. Many employers wish to foster a financially well workforce simply out of a sense of care for their staff.

While the drivers behind the push for financial wellbeing are diverse, at its core, financial health in the workplace is about empowering staff to bring their best selves to work each day. For employers looking to achieve this, we’ve compiled several steps to consider based on different levels of financial wellbeing support.

Webinars, presentations and other educational activities can be an ideal starting point to educate people about financial literacy and wellbeing. Financial systems, saving and investing can be unnecessarily complex and time-consuming to navigate, so dedicated and jargon-free resources can do wonders to help people to understand and take action on their finances.

More than half (56%) of UK employers already organise educational activities to help employees with their financial wellbeing, according to Mercer’s latest DC MOT report. Those that wish to keep pace with fostering a sense of financial wellbeing at work ought to start with this step.

While educational activities are an ideal first step, financial wellbeing is inherently personal which means it requires a personalised approach. Each workforce is home to a huge variety of financial needs. A person’s length of time in employment, the savings they’ve accumulated, whether they are a parent or carer: all these factors and more influence the kind of financial education they might need.

According to Mercer’s DC MOT report, 52% of UK employers offer personalised support that helps employees understand their financial health, such as an online tool. The key here is providing support that encapsulates an employee’s full financial picture. From pensions and savings to care requirements to individual goals such as home ownership, financial wellbeing must be holistic to reflect the way our finances shape every aspect of our lives.

While many employers provide financial education and other tools at work, many also stop here. However, financial instruments that support employees to act on what they have learned can really push the needle in terms of fostering a financially well culture.

More than half (55%) of UK employers don’t provide access to payroll individual savings accounts (ISAs) or general investment accounts (GIAs) -- specialised vehicles that help support saving and investing at lower costs than staff could access individually. Partnering with a provider that gives your workforce access to high-quality financial vehicles can help your staff not just understand their finances but also take action.

Once financial wellbeing support is made available, it’s important to make sure your workforce is aware of and uses it.

Personalised communication is key to maximising the impact of your financial wellbeing initiatives. For example, different messaging might hit home for different employees based on factors such as the size of their pension pot and other savings, their age and their closeness to retirement.

Mercer’s DC MOT is an audit of your company’s pension practices. It benchmarks your scheme and broader benefits package against those of other UK employers, and against Mercer’s view of best practice.

The results will help you understand how you stand compared to your peers, as well as how your business can save money, increase value and reduce risk in your benefits offering.

Learn more here or speak with your Mercer consultant.

Sources

1. unum.co.uk/productivity-hit-due-to-financial-worries