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A new survey highlights the links between financial wellbeing and mental health and says the issue is becoming more pressing for employers in the light of Covid.
Three quarters of employers believe their employees want them to take a more active role in supporting and addressing their financial wellbeing, but most admit they are only truly effective at supporting saving for retirement, according to a new study.
Willis Towers Watson’s Future of Financial Wellbeing study, based on a survey of 171 organisations across different industries in the UK, found over a third (36%) believe that the pandemic has had a negative impact on the financial wellbeing of their employees.
For retirement savings, nearly half of companies (47%) acknowledge that their employees face challenges, but nearly two-thirds (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 adequately supported at the moment.
Over the next two years better half say they intend to provide better emergency savings support and a similar number recognise the importance of debt and day-to-day costs support. Four in five (79%) employers also recognise the importance of greater support for retirement savings over the next two years.
The study also analyses the type of financial support currently offered by employers and the areas of emerging focus.
Facilitating savings was found to be an important area. General savings or investment accounts, corporate ISAs and Lifetime ISAs are currently offered by only a small number of employers, but the report says their importance is set to rise sharply over the next two years, with half of employers looking to introduce at least one additional type of workplace savings option within the next two years.
Financial education, guidance and advice is another area of interest. Online educational resources are already provided by over half of employers, with a further third likely to introduce it in the next two years.
Richard Sweetman, financial wellbeing lead at 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.”
Acknowledging that financial wellbeing has a knock-on impact on mental health, Sweetman added: “With the importance of financial wellbeing in the workplace now acknowledged by most employers, the challenge organisations face is how to design and deliver a successful programme. Research on employee behaviour has shown that simply providing more options to employees is unlikely to be successful if it is not supported by effective communication and decision support.
“A well-structured financial wellbeing programme will not just provide tools and apps but also coaching, seminars and guidance for employees, to help them make better financial choices. To be most effective, programmes need to relate to individuals’ circumstances and be communicated at moments in time most relevant to the employee.”
Meanwhile, a monthly report from KPMG and the Recruitment and Employment Confederation shows job hiring in the UK bounced back in April at the fastest rate since records began in 1997. Private sector employers led the increase in activity, with computing seeing the steepest increase in permanent vacancies, followed by accounting, finance and engineering. Retail was the only sector to register lower demand for permanent staff. However, those looking for work or to move jobs fell in April at the sharpest rate since January 2020, partly due to furlough but also because of concerns about job security and a reduction in overseas workers after Brexit.