Spot your employees as they build their financial wellbeing muscles
When we think of wellbeing, we tend to think about looking after our psychological and physical fitness. And when we hear the phrase ‘new year, new you’ the first thing that usually springs to mind is trudging back to the gym after feasting on mince pies over the festive period.
But a person’s financial fitness can also have an impact on both their body and their mind. Research by the CIPD shows “those who experience financial stress are more prone to absence from work. Financial stress manifests in several ways, including needing time to handle personal finances, or more serious issues such as emotional exhaustion and stress-related illness.” Footnote 1 So, by helping your employees with their money worries, you’re enabling them to bring their best selves to work each day.
The unprecedented series of events of the past five years, coupled with rising fuel, food, and housing costs have all led to increased financial uncertainty and anxiety. Recent research by Mind shows 20% of people in England and Wales have experienced worsening depression as a result of the cost-of-living crisis. And alarmingly, 6% of people have even considered suicide because of it.Footnote 2
With all this as a backdrop, it’s even more important to help people take care of their cash. So, whether it’s Pilates for pensions or spin class for savings, we’re here with some ideas on how you can help your employees get their finances in shape.
Flex your financial knowledge
It’s important to remember that a person’s financial wellbeing relates to how they feel about their finances, not how much money they actually have. So, when bills are piling up and costs keep spiralling, it can be tempting to try and keep calm-ish and carry on. But by giving employees access to resources that improve their financial savvy, you can help increase their knowhow and encourage them to face up to their money worries.
Employees covered by a financial wellbeing policy are seven times more likely to report their employer has a positive impact on their financial wellbeing, according to research by the Chartered Institute of Personal Development (CIPD). Footnote 3 So, by having an employee financial wellbeing policy in place you can pump-up your workforce’s financial fitness.
Under your financial wellbeing policy, you may choose to offer a range of resources, such as:
- Signposting employees to credible content that
o is personalised to their circumstances
o is plain speaking and easy to understand
o offers practical and actionable advice.
- Access to financial advice or finance health checks.
- Workshops on relevant topics, such as budgeting.
- Online educational hubs so employees can browse for information when it suits them.
- Apps and tools that adapt to employees’ financial needs.
By offering benefits and advice with more flexibility than a yoga class, you could help put pounds back in pockets and build your employees’ financial confidence.
Pump up your pension
Looking after your pension now gives it the best chance of looking after you when you retire. But don’t leave it to languish. Just like with exercise, regular top-ups could keep it healthy.
Easier said than done in the current financial climate, but this further highlights how important it is to help your employees understand the benefits of contributing to their workplace pension. And our Working Lives Report shows “almost 4 in 5 (79%) employees would like more support from their employer about planning for a financially comfortable retirement.”Footnote 4
Here are four ways you can jump-start your employees’ pension confidence.
- Not just what, but when. Whether they’re just starting their career or approaching retirement, make sure the support you offer is relevant for the point they’re at in their life.
- Get the most out of contributions. Let your employees know they’ll benefit from employer contributions by paying into their workplace pension, plus pension contributions also get tax relief, adding an extra 25% for most people.
- Make the most of online tools. There are a few calculators, apps and tools out there. And they can help employees take a more active role in their retirement planning.
- Find those long-lost pensions. People have an average of 11 jobs in their lifetime according to government research. Footnote 5 So encourage your employees to seek out forgotten benefits to boost their pension savings using the Pension Tracing Service.
And it doesn’t stop there. We go into more detail about how employers can support employees with their retirement goals in our article, 6 ways to keep employees engaged with their pension.
Stretch your savings
When time is tight, leg day can quickly go out of the window. Similarly, when money is tight, it can seem justifiable to put saving on standby. But by refocusing on small, achievable saving goals you can help your people make their cash go further, even in a cost-of-living crisis.
Something like skipping the 11am barista-made latte could free up around £3.50 each working day. And by the end of the month, that could add up to almost £70 to squirrel away for another day.
Education and support are key here. From budget-boosting workshops to levelling up investment insights, or even helping to stretch savings by highlighting tax-efficient options, such as ISAs. By offering a range of options you can support a financially diverse workforce through their ever-changing circumstances.
Perk up your employees with workplace benefits
Another way of looking out for your employees’ physical and mental wellbeing, is offering benefits that save them money on services they’d otherwise have to pay for.
In our Working Lives Report, we asked ‘What attracts employees to their current roles?’. Work life balance (34%) and flexible working (31%) took spots two and three respectively, only coming in behind salary (40%) at the top. Workplace benefit packages (16%) and perks, like free fruit or a pool table (9%) came lower at positions nine and eleven.Footnote 6
Many employers now include a variety of perks as part of their employee benefits package, such as discounted gym membership or access to free fitness classes, as well as physiotherapy and counselling services.
But as the stats show, alongside the perks it’s important to promote a positive workplace culture. Employees value being able to take time off for medical appointments or caring responsibilities if they need to. Holiday and sick leave policies also let people take time off without having to worry about how this will impact their income.
Maintain your financial fitness focus
Phew! What a workout! Hopefully now you have a few ideas on how you can support your employees with their financial wellbeing. The start of a new year can prompt many people to make positive changes, but it can be hard to maintain that pace over the next 12 months. So, remember to keep the conversation alive by checking in with your people regularly.