Financial wellbeing in the workplaceA summary of Aegon’s research into employer views

For employers

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Overview

The findings of the main report show that around 30% of workers are just getting by financially, and that low financial wellbeing costs business £1.56bn in lost productivity annually.

In this short report we examine the views of employers, rather than employees, and outline their views on how financial wellbeing issues affect employees and the extent to which employers feel able to support them.

Our financial wellbeing campaign has set out to provide employers, and HR directors in particular, with an insight into the extent to which financial wellbeing affects the productivity of employees. The information in this report is

based on research among more than 500 HR decision makers from a representative sample of British businesses.

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The research shows that employers see low financial wellbeing as an issue for 29% of their employees.

Employers’ views of financial wellbeing in the workplace

Many employers are aware that this may be having an effect on employee productivity, but levels of confidence when it comes to supporting staff vary greatly from business to business.

Employer views on levels of financial wellbeing in the workplace

surveyed think that financial wellbeing among employees is an issue for them.51%are worried about their staff’s ability to save for the long-term.53%think that if employees had greater financial wellbeing, they would be more productive at work.61%think that employees would be happier at work if they had greater financial wellbeing.71%

Employers’ appetite and ability to support employees with financial wellbeing

of employers said they disagree with the idea that their business isn’t interested in employee’s financial wellbeing.

46%

agree that their business is not interested in their employees’ financial wellbeing.24%However

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Research found that employers are more likely to focus on the physical wellbeing of their employees, rather than their financial wellbeing.

said their business focuses most on the physical wellbeing of employees.34%

Just a quarter (26%) said they focus on financial wellbeing the most when it comes to the wellbeing of employees. However, financial wellbeing was more of a focus than mental health.

Employer views on the causes of poor financial wellbeing

Problems with ongoing financial obligations such as rent, regular bills, cost of living

Problems with unsecured debt and loans

Feeling under prepared for a financial emergency

Problems meeting savings goals for retirement or being unhappy with pension savings more broadly

Problems with financial obligations in the family

Problems with mortgage payments44%

35%

30%

26%

25%

22%

Financial goals

Financial control

Financial shock

Which area do businesses focus the most attention on when it comes to employee wellbeing?

Physical wellbeing

Financial wellbeing

Mental wellbeing

Other

Dont know

34%

26%

15%

8%

16%

0% 100%

Base: HR decision makers (505)

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Providing information and support to employees

When it comes to offering employees support and information on money worries, there are big differences in the subjects on which employers feel confident in offering information and where they’re less sure.Employers report two main barriers to supporting employees with their finances. The first is the challenge of understanding what they’re actually allowed to do, without straying into the realms of financial advice. The second is a worry that they may be encroaching on people’s private lives by offering unwanted financial support and information.

Which areas do employers feel confident in?

69% would be confident that they would be able to provide information to employees if they had questions relating to pensions and general saving for retirement.

54% would be confident that they would be able to provide information to employees if they had questions relating to income options in retirement.

49% would be confident that they would be able to provide information to employees if they had questions relating to life insurance.

Budgeting(e.g. how to set a budget)

Debt issues (excluding studentloans and mortgages)

Students loans repayments

Pensions and generalsavings for retirement

Income optionsin retirement

Genral savings (i.e. for theshort term, not retirement)

Mortgages

Life insurance

23% 37% 18% 15% 7%

15% 35% 24% 17% 8%

17% 34% 24% 16% 9%

27% 42% 18% 8% 5%

19% 34% 25% 15% 7%

16% 33% 25% 18% 8%

16% 33% 24% 18% 9%

20% 35% 23% 15% 7%

0% 100%

Very confident

Fairly confident

Not very confident

Not at all confident

Don’t know

Base: HR decision makers (505)

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R E GU L AT I ON S

What’s the level of understanding among employers about the financial information they’re allowed to share?

38% are aware of the rules and regulations, but still don’t fully understand what level of financial information their business can offer.

39% aren’t aware of the rules and regulations around the level of financial information employers are able to give to their employees, before it becomes financial advice.

There are a number of rules and regulations around the level of financial information employers are able to give to their employees, before it becomes financial advice.

Awareness of the pension advice allowance

The UK government currently allows employers to pay for their employees to receive pensions advice costing up to £500, without employees being taxed as a benefit in kind. This information can include information or advice in connection with the employees' pension arrangements or the use of the employees' pension funds. It can include advice on general financial and tax issues relating to pensions arrangements or pension funds allowing individuals to make informed decisions about saving for their retirement.

60% aren’t are aware of the UK government scheme.

25% are aware of the UK government scheme.

75% support the idea that the scheme should be extended to advice on topics beyond just pensions.

For more information visit aegon.co.uk/financialwellbeing

Aegon is a brand name of Scottish Equitable plc (No. SC144517) and Aegon Investment Solutions Ltd (No. SC394519) registered in Scotland, registered office: Edinburgh Park, Edinburgh EH12 9SE. Both are Aegon companies. Scottish Equitable plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Aegon Investment Solutions Ltd is authorised and regulated by the Financial Conduct Authority. Their Financial Services Register numbers are 165548 and 543123 respectively. © 2018 Aegon UK plcCORP382251

The website includes a range of helpful resources to encourage wider engagement with financial wellbeing, as well as further research.

aegon.co.uk @aegonuk Aegon UK Aegon UK