Emphasising education and awareness as part of a comprehensive financial wellbeing strategy is crucial, considering how recent external factors have impacted financial challenges for individuals across various income levels.
That was the conclusion of a panel debate on wellbeing, financial resilience and the cost-of-living crisis with LCP head of financial wellbeing Heidi Allan, Corinthian Benefits head of proposition development Natasha Newby and Benefiz client director Sorangi Shah.
The discussion covered the effectiveness of different benefits in fostering financial wellbeing, innovations by providers in product offerings, methods used by employers to gauge the success of their support initiatives, and the role of a wellbeing strategy in advancing ED&I objectives.
According to the panel, a robust financial wellbeing strategy should focus on education, awareness, and a range of benefits like financial advisors, coaches, pensions, and discounts. Effective communication is particularly vital as people often lack awareness of available resources.
Shah said: “At the beginning of the cost of living crisis we saw a lot of employers offering direct financial support such as giving one-off payments and pay increases but I don’t think that’s really sustainability. It works for a period of time and might work for some employers but not all employers will be able to do that. I think the cornerstone of any financial wellbeing strategy has to be around education and awareness and then having a range of financial wellbeing benefits, that’s everything from access to advisers, financial coaches, pensions and discounted schemes.”
Newby added: “The engagement and communications piece is key because people don’t know what they don’t know.”
Allan emphasises the significance of addressing financial behaviour and education as essential solutions for financial issues caused by overspending and poor budgeting skills, rather than relying on salary increases.
Allan: “It all comes back to education, knowledge and understanding. If you put a salary advance type product in place and somebody’s got negative behaviours and they’re overspending and maybe they’re not sure where their money is actually going, by giving access to their earned income earlier, you’re not really helping the problem. You’re not addressing the behaviour that got them into that situation in the first place.”
Allan also noted that the increasing emphasis on financial wellbeing in corporations is driven by external factors affecting higher-income individuals.
She added: “One of the reasons why we’re seeing financial wellbeing become more of a conversation and rising up the agenda for a lot of corporates is because for the first time ever we’ve had so many different situations that have all come together resulting in people of higher incomes feeling the pinch. That is not through negative behaviours or poor decision making but because of circumstances outside of their control such as cost of living, rising energy prices, rising food prices, rising mortgage prices.”
Shah added to this point by highlighting that these external factors are impacting different people differently.
Shah said: “We have a lot of challenges that have affected different people in different brackets. There’s a lot of attention being put on people on the bread line but I think when you’re looking at your workforce you have to look at the whole range of people that are working with you and helping them.”
