According to the latest State of Financial Wellbeing research from Wagestream, over nine in 10 (93%) employers now have a financial wellbeing policy in place, with 91% now arguing that they provide an overall environment that is supportive of financial health. But just half (51%) of employees say their employer provides an environment supportive of financial health.
This is even though the number of organisations with financial wellbeing policies has jumped 42% since March 2021, when the CIPD found that 51% of organisations had a financial wellbeing policy. In addition to this, 87% of employers say that Covid-19 has increased their organisation’s focus on the financial wellbeing of their people.
What is driving this ‘perception gap?’
Lack of awareness of support offered?
It may be driven by poor awareness of the types of support being offered in the workplace when it comes to financial wellbeing.
For example, close to a third (21%) of employers responding to the research say they provide financial education – but just 7% of employees say their employer provides it.
The figures are 26% and 12% respectively for life assurance policies.
Focusing on the wrong things?
The perception gap may also be driven by employers focusing on the wrong things when it comes to financial wellbeing.
When asked what their top financial priority is for 2022, 31% of employees said ‘building a rainy day fund’ – but just 18% of employers are considering offering more support with saving.
In general, there’s a clear desire for employers to support employees more with their financial wellbeing, but this desire seems to be split evenly across multiple forms of support – with no clear path predominating.
Financial education, childcare support, discounts platforms, mental health support and health cash plans were all being considered for implementation within the next 18 months by around one in five (20%) of employers.
While financial wellbeing strategies do need to be reasonably wide-reaching, it’s important to focus on the basics – such as empowering individuals to save and to reduce debts – especially at a time when the number of financially vulnerable people is high. In fact, 14.2m UK adults had low financial resilience [PDF] in October 2020 – an increase of 3.5m in seven months, reversing a three-year downward trend.
Fast forward to 2022 and the cost of living now ranks top of household concerns, according to a report from the ONS. Over three-quarters (76%) of people responding to the survey said their cost of living had risen, with 90% reporting paying more for food.
Overall, the increase in focus on financial wellbeing among employers is a good thing for individuals and organisational success. Financial wellbeing is clearly on employers’ minds as we emerge from the pandemic.
But it’s important this focus is directed on the support most likely to make a difference, especially as the cost-of-living crisis has bitten – and is likely to bite harder as we go further into 2022.
Download the new report from Wagestream, State of Financial Wellbeing: The UK Workplace Report 2022, to ensure your financial wellbeing strategy is up to scratch when it comes to supporting UK employees with increased financial stress in 2022.
