A new report, The Value of Financial Coaching from TrinityBridge’s Workplace Financial Wellbeing Services, reveals that 87% of employees haven’t used financial coaching. And according to 60% of employees, their workplaces do not offer financial coaching.
Recent research indicates that currently just 12% workplaces in the UK offer financial coaching while 43% plan to add it to their wellbeing programmes in the next few years (Wealth at Work research 2024). This is good news for the 28% of employees (49% of those aged 18 to 24) who say they would use financial coaching, if it were available via their employer.
The Knowledge Gap
That said, a knowledge gap around financial coaching looms large across the working population. One in five employees (20%) do not know whether financial coaching is available through their work, while a third (34%) remain unsure as to what financial coaching even offers. As a result, over a third (34%) of employees (only 22% of those aged 18 to 24) were undecided whether they would use a financial coaching service or not.
This knowledge gap is further evidenced when examining the reasons why 38% of employees said they wouldn’t use financial coaching, even if it was offered at work. Nearly one in three (28%) don’t think the service is relevant to their financial situation. Similarly, 21% weren’t even sure what financial coaching offers or how it could help them.
Given financial coaching may be a solution for the advice gap, the data shows the employees most commonly using the service tend to be those on higher incomes, with almost half (47%) earning £100k +. This significantly drops, to 18% of those earning £80-£100K and 13% of those earning £40k – £60k. This divergence in take up between income groups highlights the benefit of a push from industry and workplaces alike to communicate the value of financial coaching to those who need it most.
Away from the knowledge gap, the other primary reason people decline the use of financial coaching is that 60% say they feel confident managing their own finances. However, this seems to be at odds with the reality of people’s finances as reported daily. Other reasons include one in ten (11%) preferring to use a financial adviser and another one in ten (9%) saying they’d favour guidance from other sources like family and friends, as well as online sources.
Positive impact beyond finances
Crucially, for those who have used financial coaching, the positive impact is huge and stretches beyond just finances. Over one in three (37%) now feel more confident about their finances, and 34% say it has helped them to understand how to better manage their money. Over a quarter (27%) feel equipped with tools to make better choices with their money going forward and a further 25% feel more positive about the future – this rises to 33% for those aged 25 – 34. One in five (19%) have said their mental health had improved – this increases to 26% for those aged 35 – 44.
The frequency and the way financial coaching is accessed also speaks to its value; 41% use it several times a year, with the figure rising to 57% amongst the younger generation (25-34). Half that number (21%) have used it just once. For one in five (19%), financial coaching provides reassurance that there is someone to help if they ever needed it again in the future.
Missing a trick
What this shows us is that the 38% of those who said they wouldn’t use financial coaching are missing a trick when it comes to boosting financial fitness for the long term. Half (50%) of those who have used it have increased financial confidence, while 43% use it to improve money skills and money management – this rises to 53% amongst the younger generation (25-34). A fifth (22%) say financial coaching has helped to change their behaviours with money long-term.
Jeanette Makings, Head of Workplace Wellbeing Service, TrinityBridge says: “As employees across the UK continue to face the challenges of a rising cost of living, coupled with an expanding gap in those accessing financial advice, the potential of financial coaching is increasingly important as an essential component of workplace wellbeing strategies.
The common thread running through this report is that financial coaching is highly valued by those that have used it, but for those that haven’t it, is frequently misunderstood. It evidences a strong need for more education as to what financial coaching offers and how it can help any financial situation. The positive impact of financial coaching for those who use it is both tangible and significant. For employers too, it offers a highly effective means of boosting financial wellbeing, increasing staff engagement, and empowering them to take control of their personal finances, with corresponding benefits for overall wellbeing, and productivity.”
