- Top issue currently facing employees (36%) is keeping up with normal living costs
- But few employers offer the benefits that employees want to help improve day to day finances
- An advice gap exists in the workplace – employees want financial advice but few employers offer it
The latest report from Close Brothers’ Workplace Financial Wellbeing Services, Spotlight on UK financial wellbeing, digs into the financial wellbeing of the UK’s workforce, revealing that despite being in the midst of a cost-of-living crisis, where money worries have increased for many employees, financial wellbeing is still way down the priority list for many companies.
Needs are not being met
The research revealed that the top issue currently facing employees is being able to keep up with normal living costs (36%), while 35% are worried about not being able to afford to retire and 32% are worried about managing mortgage and rental costs. However, these priorities come way down on corporate agendas where supporting staff with their cost-of-living issues is eighth on the list, and financial wellbeing is twelfth.
The report shows that relatively few employers offer benefits that employees have said could make a real difference to their finances. For example, employee shopping discount schemes are only offered by 37% of companies, holiday purchase/sellback benefits are offered by just 26% of companies while hardship loans (19%) and mortgage advice are offered by 19% of employers and 17% of employers respectively.
In fact, in general, there is a mismatch between what employers are offering and what employees need when it comes to benefits. For example, season ticket loans, offered by a third (33%) of companies, and cycle to work schemes, offered by 55% of employers – neither of which feature on the employee wish list – are much less relevant now with more people working remotely, at least for part of their working week.
The benefit mismatch
| The benefits employees would like | Top benefits offered by employers |
| 52% pension | 74% pension |
| 38% private medical insurance | 57% death in service protection |
| 36% financial advice | 55% cycle to work |
| 34% critical illness cover | 48% private medical insurance |
| 31% employee shopping discount scheme | 43% Employee Assistance Programme – with debt counselling |
| 30% death in service protection | 42% life assurance |
| 30% income protection | 41% salary sacrifice/ salary exchange benefits |
| 27% long service awards | 37% employee shopping discount scheme |
| 27% dental insurance | 37% eye tests |
| 26% holiday purchase & sell back | 35% Employee Assistance Programme – without debt counselling |
*Highlights show the benefits not on employee top 10
There are some areas where employees and employers align: 74% of employers provide a pension and 57% provide death in service, both of which feature on the employee’s list of most wanted benefits. Other benefits such as holiday purchase/sell back feature in the employee top 10, but only just make it into the employer top 20, with just a quarter (26%) of companies offering it. Critical illness cover, fourth in employee priorities (34%), barely feature among the list of benefits offered by employers while dental insurance (27%) is only offered by a small proportion of employers.
The advice gap
The research shows that not only is there a benefit-disconnect, there is also an advice gap. When considering the various elements of support that can be provided in financial wellbeing programmes, advice represents four of the five services employees most value. Top of the list is pensions advice with 43% of employees saying they would value it, while 36% want financial advice and 19% would like mortgage advice.
And yet, few companies offer advice. Astonishingly, only 22% provide financial advice with a pension provider as part of their retirement planning support, despite the complexity of this decision, and only 15% of companies provide financial advice.
| What employees want to improve their financial wellbeing | What employers currently provide | |
| Pensions advice | 43% | 22% |
| Financial advice | 36% | 15% |
| Mortgage advice | 19% | 17% |
Jeanette Makings, Head of Workplace Financial Wellbeing comments:
“The events of the last three years have wrought a seismic change on working patterns and household finances. The pandemic saw people take stock and focus on their lives, which inevitably also brought a reappraisal of their finances. They recognised the importance of having an emergency fund, and wider financial protection for their family. It also prompted an increase in hybrid working, which saw people move house, or change their lifestyle.
“It is increasingly clear that workplace benefits and financial wellbeing programmes have failed to keep pace with these shifts. At a moment when employees are more engaged than they have ever been with their finances. And with the significant influence financial wellbeing has on mental wellbeing, there are huge benefits for employers that are alive to and agile in making changes to their workplace benefits and wellbeing programmes to better align them with employees’ needs.”
