LONDON – 17 November 2016 - Despite 65% of employees citing financial wellness in the workplace as important to them, only 7% of employers are providing any sort of retirement planning support. Thomsons Online Benefits in its Future of Financial Wellness report found that UK employers are struggling to cater for and support a multi-generational workforce’s complex and varied financial needs. This is at a time when household debt has reached a record high of £1.5 trillion and younger generations have less money in real terms than in the 1950s.
The research, which compared the views of 700 employees and HR & reward professionals at large companies in the UK, found a major disparity between employee expectations and what employers are offering to support financial wellness in the workplace. Many UK-based companies are not currently providing relevant financial benefits, convenient access to those benefits, nor offering financial education programmes to empower employees to make informed decisions around debt, mortgages, budgeting and savings.
The research found that:
- While 97% of employers are providing a pensions scheme, only 7% offer any type of retirement planning support – worrying given the array of legislative reform which has driven further complexity in the market
- Over half of UK employers report they are not providing their employees with relevant financial benefits, and
- Only 15% of UK employers have a financial education programme – concerning when the UK has a lower than average financial literacy score (ranked 15th out of 30 countries according to a recent OECD study )
“Employers have a responsibility to improve employee financial wellness not just as a duty of care, but to optimise employee engagement and business productivity. Only offering a pension and life assurance won’t cut it with a multi-generational workforce who need broader financial support beyond retirement options,” said David Dodd, Consulting Director at Thomsons Online Benefits. “The good news is that the market is responding with new types of financial products to meet employee demand at different life stages. Now employers must listen to their people, understand their needs and tailor financial wellness programmes with relevant solutions for different demographic groups. Employers who prioritize employee wellness now have the tools available to meet these complex needs and support their people to make sound financial decisions, giving them access to expert advice from FS providers and online tools.”
The convenience factor
Employees are demanding intuitive online experiences like the ones they have as consumers of services like Uber and Amazon. This is setting a challenge for how they should access their financial benefits. Thomsons’ research shows that the largest single factor influencing employees’ perception of benefits is convenience. Over two thirds of employees (68%) want a single place to access all their benefits, yet only 16% of employers currently offer this. Over half of people (54%) want access to benefits from their mobile device, yet only 28% of UK companies offer this. And half of employees (52%) want single sign on access to their benefits but only 27% of employers offer this.
The provision of financial wellness services and education needs to be delivered in a way which is as convenient and as accessible as possible to employees. Those employees with access to benefits via a mobile app are six times more likely to be very engaged with their organisation and much more engaged with their benefits (34% compared to 21% if an app isn’t being used).
The situation is set to improve though – 47% of UK employers report they are considering implementing a financial wellness programme in 2017. Those already adopting a financial education programme are reaping the rewards: employees are twice as likely to be very or extremely engaged in their organisation (38% vs 19%) and HR and reward professionals are twice as likely to be very effective at meeting their benefits objectives.
“We recently introduced a workplace ISA scheme through our online benefits portal to give employees a convenient and tax-efficient way of saving. We wanted to offer a product that was relevant and accessible to our diverse workforce; employee feedback has been incredibly positive," said Spencer Hamp, Senior Reward Manager at international law firm Ashurst. “Paired with regular financial well-being masterclasses, mortgage and pensions surgeries as well as access to 24 hour support via our Employee Assistant Programme, we’re empowering our people to make informed decisions about their financial future.”
The report outlines an approach which employers can take to adopt a more holistic view of financial wellbeing into its overall benefits strategy. For more information to download the Future of Financial Wellness report.
About Thomsons Online Benefits
Thomsons is a SaaS provider of global employee benefits and employee engagement software. Our award-winning platform, Darwin™, is the global market leader for automated employee benefits administration. With over 1 million worldwide users, Darwin™ connects employees with their benefits in over 80 countries and 24 languages. By using the right combination of editions, Darwin™ provides a tailored solution to meet a variety of employee benefit and reward needs, including employee engagement, managing risk, controlling costs and streamlining benefits administration. Its ability to constantly evolve and cater for shifting workforce needs has made it the provider of choice for seven of the world’s top ten technology companies. Thomsons has received 105 industry awards, including the prestigious Brandon Hall Group gold award for Best Advance in Rewards and Recognition Technology in 2015.
About the research
Future of Financial Wellness surveyed around 200 HR and reward professionals and 500 employees in the UK covering a headcount of nearly two million to compare their respective views on benefits and assess whether, in their current form, they are still fit for purpose.