A new study by the multinational advisory, broking and solutions company, Willis Towers Watson highlights an increasing disconnect between employee financial wellbeing and their company benefit programmes.
A new study by the multinational advisory, broking and solutions company, Willis Towers Watson highlights an increasing disconnect between employee financial wellbeing and their company benefit programmes.
They found that whilst many employers report a mixture of issues facing employees – such as debt, short-term savings, housing and retirement savings – with most admitting they are only truly effective at supporting saving for retirement.
It is a problem highlighted by the pandemic with many employees requiring to dip into savings to supplement income lost if they had been placed on a furlough scheme and have had limited or no access to the further benefits that were part of their employment.
Willis’ Future of Financial Wellbeing study was a survey was conducted during February and March 2021 and includes responses from 171 organisations across different industries in the UK.
It showed 76% of employers believe that their employees want them to take a more active role in supporting their financial wellbeing. While 36% believe that the pandemic has had a negative impact on the financial wellbeing of their employees.
For retirement savings, the study found 47% of employers acknowledge that their employees face challenges, but 61% are confident their retirement savings provision is effective. Emergency savings and day-to-day cost and debt are also identified as challenging areas for employees that are not currently supported adequately.
Richard Sweetman, Financial Wellbeing Lead, Willis Towers Watson, said:
“Organisations realise employees are currently facing a wider array of financial challenges and are looking to evolve from a focus on helping employees save for retirement, to adopt broader financial wellbeing programmes that provide the help they need. Many employers are now accelerating their focus on financial wellbeing in response to COVID-19, and the associated economic impacts.”
Willis asked their respondents what employer priorities would change in the next two years to better reflect the financial needs of their employees. 50% said they intend to provide better emergency savings support and a similar number recognise the importance of debt and day-to-day costs support.
They also found broader focus on financial wellbeing is unlikely to come at the expense of retirement provision as 79% of responders acknowledged the importance of greater support for retirement savings over the next two years.
Sweetman continued, “Debt and the ability for employees to make ends meet should be a particularly important area for employers to focus on, with almost a quarter of employees seemingly affected. We know from employee research that when these issues do come up, they have a particularly detrimental impact on mental health and wellbeing.”
The study also analysed the type of financial support currently offered by employers, and the areas of emerging focus.
Facilitating employees’ savings was flagged as an area of interest. General savings or investment accounts, corporate ISAs and Lifetime ISAs are currently offered by only a small number of employers, but Willis predicts their importance will rise, with 50% of respondent employers looking to introduce at least one additional type of workplace savings option within the next two years.
Financial education, guidance and advice is widely viewed by employers as an important part of their financial wellbeing provision. Willis say online educational resources are already provided by over half of their respondent employers, with a further third likely to introduce it in the next two years.
Main Image Credit: Andre Taissin
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