Employers stress the ticking time bomb of financial wellbeing

Employers have warned that financial wellbeing is a critical concern, with two thirds (65%) of HR decision-makers predicting that this will become the next big employee challenge for companies.

New research from Scottish Widows, which surveyed more than 500 HR leaders from UK firms, reveals that financial concerns during the pandemic have led to almost half of workers experiencing increased anxiety and stress. Four in ten employers say financial challenges have had a negative impact on employee productivity and motivation.

Employees are taking action to address such issues, with more than six in ten HR leaders (65%) saying employees are increasingly willing to discuss their mental health with their bosses.

Reflecting this shift in attitudes, more than half of employees (52%) now look to their employer for support on issues such as personal debt, the increased personal costs related to working from home, and saving for retirement (52%).

Progressive employers are boosting pensions to help

Employers recognise they have an important role to play in helping to improve the financial and mental wellbeing of their workforce, with a significant proportion already taking action to help their employees achieve long-term financial security.

Over a third of employers (36%) have increased employer contributions to employee pensions beyond the legal minimum, while 34% plan to do so within the next two years, according to the survey.

There remain clear opportunities to go further. Today, just a third of employers (29%) refer their employees to an Independent Financial Adviser (IFA) who can provide valuable advice on current and future financial issues, including saving for retirement. 

HR decision-makers recognise the need for action, with over half (54%) agreeing that their business needs to do more to support employees with financial wellbeing issues.

Graeme Bold, Workplace Pensions Director at Scottish Widows, said:

“Huge strides have been made when it comes to addressing mental health at work in recent years, and it’s vital that this also extends to financial wellbeing.

“The past 18 months have brought unprecedented challenges for everyone, and many people will have seen their finances drastically affected. People who are worried about their finances will often struggle at work and need extra help and support to get back on track.

“Left unchecked, this problem could become a ticking timebomb for both employers and employees. Employers are well used to the idea of investing in support services such as mental health first aiders and counselling helplines. Forward-thinking companies could extend this support to financial wellbeing – for example, implementing a ‘financial wellbeing’ policy or referring employees to an IFA for advice. A solid support system will help workers to build up their financial resilience, in turn enabling them to focus on their work – which will hopefully lead to career progression to further help them financially.

“Opportunities to discuss financial issues with an employer, such as the recent Pension Awareness Day, can help employees focus on their long-term financial planning and share any concerns they might have about their future. For employers it’s crucial to take the lead in supporting their employees with financial wellbeing and long-term resilience. Fostering a culture of support, openness and engagement will lead to happier and more productive workplaces.”

Author: Editorial Team

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