CIPD highlights need for employers to address financial wellbeing

A new CIPD survey shows that 10% of employees fear their job won’t protect them from falling into poverty amid calls for employers to put financial wellbeing front and centre.

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Nearly one in five employees (19%) say their employer is not doing enough to support their financial wellbeing, with one in 10 saying their job doesn’t protect them from falling into poverty, according to new research from the Chartered Institute of Personnel and Development [CIPD].

The survey, based on a poll of 2,500 employees, shows that around one in eight employees (12%) say their pay is not enough to support an acceptable standard of living without having to go into debt to pay for food/bills.

More than a quarter (27%) report their pay is not enough to cope with a £300 emergency (without having to use savings), and only 47% said their pay is enough to help save for retirement.

One in four (28%) have money problems which affect their job performance, rising to 34% of those earning less than £20,000. For example, 19% have lost sleep due to worrying about money.

The CIPD says employers need to start offering greater financial wellbeing support to their workers and is calling on all employers to develop a financial wellbeing policy that sets out a commitment to supporting people to achieve a decent standard of living and provide employees with financial wellbeing support – such as offering targeted benefits and normalising conversations about money and career progression.

More than four-fifths of employees (81%) whose employer has a financial wellbeing policy say it is important any future employer has such a policy. They are also far more likely to say their employer does enough to support their financial wellbeing (60% versus 28%); and are more likely to say they are keeping up with all bill and credit card commitments without any difficulties (70% versus 58%).

Employees working for an organisation with such a policy are also far more likely to say they have a good level of benefits (70%) than those with employers who don’t (28%). This could include such benefits as occupational sick pay, training and career development opportunities, flexible working, and gym membership.

They are also much more likely to say their employer offers them a generous pension (64% versus 26%) and that their pay is enough to help them save for retirement (61% versus 41%).

Charles Cotton, senior reward and performance adviser at the CIPD, says: “The biggest difference an employer can make is to pay a fair and livable wage. But even organisations who can’t afford to increase wages right now can support their workforce in other ways.

“Our research highlights that employers with a financial wellbeing policy really do make a much-valued difference to the lives of their people. Unfortunately, the cost-of-living crisis is likely to push more and more employees into in-work poverty. This, along with the competition for talent right now, should motivate all organisations to adopt a financial wellbeing policy or improve their existing one.”

The CIPD has launched a new web hub, in collaboration with the Joseph Rowntree Foundation, which hosts a range of explainers and resources for employers who want to take action against in-work poverty. It covers a fair wage, financial wellbeing support and in-work progression.



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