UK employers failing to support workforce in financial wellness

Employers are disconnected with staff demands for financial wellness schemes, a new study reveals.

Despite 65 per cent of employees citing financial wellness in the workplace as important to them, only 7 per cent of employers are providing any sort of retirement planning support.

Thomsons Online Benefits in its Future of Financial Wellness report finds that UK employers are struggling to cater for and support a multi-generational workforce’s complex and varied financial needs.

This is at a time when household debt has reached a record high of £1.5 trillion and younger generations have less money in real terms than in the 1950s.

The research, which compared the views of 700 employees and HR & reward professionals at large companies in the UK, reveals a major disparity between employee expectations and what employers are offering to support financial wellness in the workplace.

Many UK-based companies are not currently providing relevant financial benefits, convenient access to those benefits, nor offering financial education programmes to empower employees to make informed decisions around debt, mortgages, budgeting and savings.

While 97 per cent of employers are providing a pensions scheme, only 7 per cent offer any type of retirement planning support – worrying given the array of legislative reform which has driven further complexity in the market

Over half of UK employers report they are not providing their employees with relevant financial benefits, and only 15 per cent of UK employers have a financial education programme – concerning when the UK has a lower than average financial literacy score (ranked 15th out of 30 countries according to a recent OECD study).

David Dodd, consulting director at Thomsons Online Benefits thinks that employers have a responsibility to improve employee financial wellness not just as a duty of care, but to optimise employee engagement and business productivity.

‘Only offering a pension and life assurance won’t cut it with a multi-generational workforce who need broader financial support beyond retirement options.

‘Now employers must listen to their people, understand their needs and tailor financial wellness programmes with relevant solutions for different demographic groups. Employers who prioritise employee wellness now have the tools available to meet these complex needs and support their people to make sound financial decisions, giving them access to expert advice from FS providers and online tools.’

The convenience factor

Employees are demanding intuitive online experiences like the ones they have as consumers of services like Uber and Amazon. This is setting a challenge for how they should access their financial benefits. Thomsons’ research shows that the largest single factor influencing employees’ perception of benefits is convenience.

More than two thirds of employees (68 per cent) want a single place to access all their benefits, yet only 16 per cent of employers currently offer this. More than half of people (54 per cent) want access to benefits from their mobile device, yet only 28 per cent of UK companies offer this. Half of employees (52 per cent) want single sign on access to their benefits but only 27 per cent of employers offer this.

The provision of financial wellness services and education needs to be delivered in a way which is as convenient and as accessible as possible to employees. Those employees with access to benefits via a mobile app are six times more likely to be very engaged with their organisation and much more engaged with their benefits (34 per cent compared to 21 per cent if an app isn’t being used).

The situation is set to improve though – 47 per cent of UK employers report they are considering implementing a financial wellness programme in 2017. Those already adopting a financial education programme are reaping the rewards. Employees are twice as likely to be very or extremely engaged in their organisation (38 per cent vs 19 per cent) and HR and reward professionals are twice as likely to be very effective at meeting their benefits objectives.

Further reading on retirement planning

 

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