LONDON, May 6, 2021 – A new study by Willis Towers Watson highlights an increasing disconnect between employees’ financial needs and their company benefit programmes. Whilst many employers report a mixture of issues facing employees – such as debt, short-term savings, housing and retirement savings – most admit they are only truly effective at supporting saving for retirement.
According to the company’s Future of Financial Wellbeing study, released today, three quarters (76%) of employers believe that their employees want them to take a more active role in supporting their financial wellbeing. While 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.
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.”
“Many employers are now accelerating their focus on financial wellbeing in response to COVID-19, and the associated economic impacts.”
Richard Sweetman | Financial Wellbeing Lead
Looking ahead, employer priorities for change in the next two years better reflect the financial needs of their employees. Half intend to provide better emergency savings support and a similar number recognise the importance of debt and day-to-day costs support.
Crucially, the focus on broader financial wellbeing is unlikely to come at the expense of retirement provision as four-in-five (79%) employers recognise the importance of greater support for retirement savings over the next two years.
“Debt and the ability for employees to make ends meet should be a particularly important area for employers to focus on, with almost a quarter of employees seemingly affected. We know from employee research that when these issues do come up, they have a particularly detrimental impact on mental health and wellbeing,” said Sweetman.
The study also analyses the type of financial support currently offered by employers, and the areas of emerging focus.
Facilitating savings is an important area. General savings or investment accounts, corporate ISAs and Lifetime ISAs are currently offered by only a small number of employers but 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 widely viewed by employers as an important part of their financial wellbeing provision. Online educational resources are already provided by over half of employers, with a further third likely to introduce it in the next two years.
Sweetman said: “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.”
Willis Towers Watson’s Future of Financial Wellbeing survey was conducted during February and March 2021 and includes responses from 171 organisations across different industries in the UK.
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving in more than 140 countries and markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.
