WellbeingRewards & BenefitsEmployee BenefitsMake 2018 the year of financial wellbeing

Make 2018 the year of financial wellbeing

January can often seem like the longest month. It’s dark and cold and the only thing to look forward to is…February. Many employees will have been paid a little early because of the festive break, meaning that it is also the month when money – already in short supply after the expense of Christmas – has to go further than ever.

January can often seem like the longest month. It’s dark and cold and the only thing to look forward to is…February. Many employees will have been paid a little early because of the festive break, meaning that it is also the month when money – already in short supply after the expense of Christmas – has to go further than ever.

For some employees, that financial stretch will be a temporary state of affairs. But for employees who are already struggling financially, the extra end-of-year costs and longer break between pay dates can aggravate existing money problems.

The need to help employees take control of their finances has never been greater. Wage increases are not keeping pace with inflation, meaning that day-to-day budgeting is becoming more difficult for many while personal debt levels are also rising. Consumer credit has increased by 19% over the last five years, according to Bank of England statistics*, and the Office for Budget Responsibility estimates that unsecured household debt will reach 47% of income by 2021.

Debt and fluctuating work patterns make financial planning challenging, but changes to pension arrangements mean that individuals must also now take more responsibility for planning their own retirement. Most employers have moved away from defined benefit pensions, where an individual’s income for the whole of his or her retirement was related to their final salary and increased over time in line with inflation. For the most part, these have been replaced with defined contribution pension schemes, which build a pot of money for an employee who must then decide how to spend or invest it to support them for the rest of their life.

Aon’s DC Scheme Survey 2017 showed that there is still a lot of work to do in supporting employees with their retirement plans. Over half of our respondents did not know how much their scheme members were likely to receive when they retire. Only 14% of schemes said they offered access to the recently introduced Pensions Advice Allowance, which is designed to help individuals get tax-free financial advice as they approach retirement.

Poor financial wellbeing is not restricted to the young or to those approaching retirement. Nor is it specific to lower paid workers. Research by the Chartered Institute of Personnel and Development in early 2017 showed that 20% of those earning between £45,000 and £59,999 said that financial concerns had affected their ability to do their job**.

Given the pressure on employees’ day-to-day finances and the need for individuals to plan how to fund their own retirement, it is no surprise that many people feel out of control financially. Longer term, that can affect an individual’s mental and physical health as well.

That means employers should be concerned about their employees’ financial wellbeing, too. If individuals are so worried about their finances that they are unable to perform properly at work, that will have knock-on effects on sickness absence and productivity.

However, employers are also very well placed to help support staff with their finances. Employees already associate work with money, and the majority of employees say that they trust communications from their employer about pensions and other benefits***.

That help does not have to be expensive or time-consuming, but it does need to be appropriate to the workforce and delivered in a way that means employees can get the help they need when they need it, and take back control of their finances. Some simple steps include:

Understand employees’ needs: employers might already be aware that some of the workforce are struggling. That could be backed up with anonymised feedback from employee assistance programmes, anecdotal information from line managers or through more formal means such as staff surveys. You may know that there are specific challenges that need to be addressed as well, such as April’s increase in the minimum auto-enrolment pension contributions, or helping graduates with student debt.

What's Hot

HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World

Roundtable Report HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World 5 May 2022

9m

HRD Roundtable Report: Levelling Up Onboarding for...

Attracting new talent is shooting up the priority list, but also proving more difficult than ever. A...

View event
HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments

Roundtable Report HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments 26 May 2022

9m

HRD Roundtable Report: Redefining Company Culture ...

The process of redefining a company culture is a complex one. Culture contributes directly to the da...

View event
Learning to win the talent war: how digital marketing can develop its people

Whitepaper | Talent Development Learning to win the talent war: how digital marketing can develop its people

9m

Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. I...

View resource
HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce

Roundtable Report HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce 5 May 2022

9m

HRD Roundtable Report: Strategies For Re-Engaging ...

We know hybrid working is here to stay, forcing many organisations to experiment with innovative and...

View event
HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain

Roundtable Report HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain 3 March 2022

9m

HRD Roundtable Report: Making it ‘Worth It’ – What...

We know the pandemic has caused many people to revaluate their careers and relationships with work a...

View event
Dave Ulrich: How can business and HR leaders simplify complexity?

Leadership Development Dave Ulrich: How can business and HR leaders simplify complexity?

1y Dave Ulrich

Dave Ulrich: How can business and HR leaders simpl...

HR thought leader Dave Ulrich outlines ways leaders can deal with complexity in an increasingly busy...

View article
HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making

Roundtable Report HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making 5 May 2022

9m

HRD Roundtable Report: Using HR Data to Inform Org...

Historically, HR hasn’t been as effective as it could be in sharing and communicating data with wide...

View event
Digital transformation investment grows but critical skills gaps remain - Coursera report

Digital HR Digital transformation investment grows but critical skills gaps remain - Coursera report

1y Leah Belsky

Digital transformation investment grows but critic...

Covid-19 has accelerated the rate of digital learning on a global scale. Coursera's latest report pr...

View article
Wellbeing in the hybrid workplace: how to successfully drive engagement

Employee Engagement Wellbeing in the hybrid workplace: how to successfully drive engagement

1y Alara Basul | Sponsored

Wellbeing in the hybrid workplace: how to successf...

Remote working has impacted the way we communicate as a workforce, but striking the right balance be...

View article
How to create a company culture capable of empowering the modern workforce

Culture How to create a company culture capable of empowering the modern workforce

1y Alara Basul | Sponsored

How to create a company culture capable of empower...

While new working patterns that emerged from the pandemic have earned a permanent spot in the w...

View article
WATCH: Connection and collaboration in a hybrid workplace

Leadership Learnings WATCH: Connection and collaboration in a hybrid workplace

1y Amy Kirkham

WATCH: Connection and collaboration in a hybrid wo...

Alison Noon-Jones, VP of People & Culture at Leidos UK & Europe, shares how crucial employee engagem...

View article
Turbulence ahead: Why it’s time to be bold in your leadership

Leadership Development Turbulence ahead: Why it’s time to be bold in your leadership

1y Terence Mauri

Turbulence ahead: Why it’s time to be bold in your...

HRD thought leader and Hack Future Lab founder Terence Mauri sets out why the biggest risk to leader...

View article

Build support: This could be as simple as sign-posting help from third parties, such as the Money Advice Service, through to introducing tools like Aon’s My Money service that enables employees to see all of their finances together in one place or providing face-to-face financial advice at appropriate points in employees’ careers. Getting line managers involved, so that staff feel they can talk to someone if they are struggling financially, is also important.

Measure impact: It is vital to be able to assess the effect of any financial wellbeing activity that you carry out. This can help to make the case for further investment and help the business to understand that it really is having a positive impact on employees’ wellbeing.

No organisation is too big or too small to help employees with their financial wellbeing – and even if budgets are limited, there are simple, cost-effective first steps that employers can take to help. Now is the time to make 2018 the year that employees take more control of their finances, and employers can look forward to a more engaged, productive workforce as a result.

For a copy of Aon’s DC Scheme Survey 2017 visit www.aonhewitt.co.uk/dcpensions

REFERENCES

* https://www.theguardian.com/business/2017/sep/18/uk-debt-crisis-credit-cards-car-loans

** https://www.cipd.co.uk/Images/financial-well-being-infographic_tcm18-17442.pdf

*** https://www.closebrothersam.com/docs/default-source/fes/close-brothers-lifetime-savings-challenge-whitepaper.pdf (Close Brothers and PLSA) p.43

Comments are closed.

What's Hot

HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World

Roundtable Report HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World 5 May 2022

9m

HRD Roundtable Report: Levelling Up Onboarding for...

Attracting new talent is shooting up the priority list, but also proving more difficult than ever. A...

View event
HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments

Roundtable Report HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments 26 May 2022

9m

HRD Roundtable Report: Redefining Company Culture ...

The process of redefining a company culture is a complex one. Culture contributes directly to the da...

View event
Learning to win the talent war: how digital marketing can develop its people

Whitepaper | Talent Development Learning to win the talent war: how digital marketing can develop its people

9m

Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. I...

View resource
HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce

Roundtable Report HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce 5 May 2022

9m

HRD Roundtable Report: Strategies For Re-Engaging ...

We know hybrid working is here to stay, forcing many organisations to experiment with innovative and...

View event
HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain

Roundtable Report HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain 3 March 2022

9m

HRD Roundtable Report: Making it ‘Worth It’ – What...

We know the pandemic has caused many people to revaluate their careers and relationships with work a...

View event
Dave Ulrich: How can business and HR leaders simplify complexity?

Leadership Development Dave Ulrich: How can business and HR leaders simplify complexity?

1y Dave Ulrich

Dave Ulrich: How can business and HR leaders simpl...

HR thought leader Dave Ulrich outlines ways leaders can deal with complexity in an increasingly busy...

View article
HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making

Roundtable Report HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making 5 May 2022

9m

HRD Roundtable Report: Using HR Data to Inform Org...

Historically, HR hasn’t been as effective as it could be in sharing and communicating data with wide...

View event
Digital transformation investment grows but critical skills gaps remain - Coursera report

Digital HR Digital transformation investment grows but critical skills gaps remain - Coursera report

1y Leah Belsky

Digital transformation investment grows but critic...

Covid-19 has accelerated the rate of digital learning on a global scale. Coursera's latest report pr...

View article