Bridging the Gap: Aiding Employee Financial Wellbeing in the Workplace

Part of this struggle is due to an empathy gap where higher earners underestimate the financial savviness of their less fortunate colleagues. Employers hold a pivotal role in supporting their employees' financial wellbeing through practical, action-driven interventions.

The Current Landscape

Some challenging statistics have surfaced from recent research, indicating a pressing need for employer intervention. The data shows:

• Higher earners spend twice as much as lower earners on groceries and housing.
• The median savings balance for lower earners sits at a modest £3,000, compared to higher earners who have a robust savings of £25,000.
• Pay instability is a prevalent issue for nearly 30% of lower earners, who report their pay fluctuates month-to-month.
• There's a notable disparity in financial satisfaction levels as 36% of individuals are unsatisfied with their financial situation, while 53% are content.
• Anxiety about finances is a common concern with 35% of respondents worry weekly or more often, whereas 50% rarely or never worry about money.
• An encouraging note: 7 in 10 employees begin to save when an automatic payroll savings option is offered.

Recommendations for Employers

Given this scenario, employers have a significant role in addressing these issues and aiding their colleagues. Here are three practical recommendations:

• Promote a living wage: Aim to meet the Living Wage Foundation's standard for living hours. This will help ensure all employees have a fair, stable income, reducing financial instability and promoting a healthier financial environment.
• Establish a payroll savings programme: Implementing a payroll savings programme with an opt-out structure can be a game changer. It aids in systematically building up savings by default, providing a safety net for those unexpected life events. This approach was shown to encourage up to 70% of employees to start saving.
• Re-evaluate workplace financial wellbeing programmes: Ensure they are action-oriented and provide financial security benefits that are useful and accessible for all employees. Prioritising such a review will bridge the gap between knowledge and action, helping to alleviate financial stress and increasing employee wellbeing and productivity.

The responsibility employers hold in shaping their employees' financial wellbeing is significant. By instituting these changes, they can make a real impact - and potentially change lives for the better. Download the full research.