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As the high cost of living continues to put the strain on people’s budgets, financial worry is starting to feel like the norm. Implementing an effective financial wellbeing strategy is a good way for your clients to support their members.

Financial wellbeing appears to be at a low point, with many feeling worried about how far their finances will stretch as costs continue to rise. Indeed, Standard Life’s Retirement Voice 2022 report, which asked almost 6,000 people from across the UK on their views on pension planning and retirement, found that:

• Just 41% of people feel positive about their financial situation
• Almost half are looking to cut back on everyday spending
• 4 in 10 would consider reducing or stopping their pension contributions

Money worries like these can, unsurprisingly, spill into people’s work life too. This can raise the business risks linked to having a workforce with poor financial wellbeing and resilience, such as lower performance and productivity levels, increased stress and absenteeism, and difficulties retaining staff.

By investing in a financial wellbeing strategy that supports members, your clients can help bolster their financial capability and support them in their aim to achieve the financial goals that matter most to them. Not only that, members who feel financially well are more likely to be healthier, happier, and able to bring their best selves to work.

Implementing a financial wellbeing strategy can also give clients a competitive advantage over those that don’t. In fact, a survey by CIPD found that 65% of people think having a financial wellbeing policy will be an important factor when they consider their next employer.

Employers think a financial wellbeing strategy is important – but not all have one

In an annual employer survey by Standard Life, which tracks employer needs and challenges, 9 in 10 employers say that having a financial wellbeing strategy is important to them. Despite this, only half (52%) have a financial wellbeing strategy in place already – highlighting a hefty gap. And given the effect that poor financial wellbeing can have on individuals and businesses, more needs to be done to help close that gap.

With that in mind, if your clients are looking to create a financial wellbeing strategy from scratch – or strengthen their existing one – here are a few ideas that could help them get started.

Tips for building an effective financial wellbeing strategy

Engage with key stakeholders

For a financial wellbeing strategy to make the most impact, it’s important to get buy-in from key business stakeholders. This means engaging not only with HR or reward teams, but with leadership team too. Senior managers set the tone for direction and culture within the workplace, so it’s important to get them on board.

Your clients could also create a business case to promote the benefits of supporting members’ financial wellbeing, outlining how it can support the wider strategic direction and values of the business. If they have a broader health and wellbeing strategy, they can highlight the ways in which adding financial wellbeing support can enhance it. Crucially, they should include the well-documented risks and costs associated with having a workforce that is financially unwell.

Understand what members need

Financial unwellness can affect people differently, so there’s not a one-size-fits-all approach to helping those who may be struggling. In addition, there can still be a stigma attached to having low financial capability, leaving some people feeling uncomfortable or unwilling to discuss their financial concerns. Research by The Money and Pensions Service reveals that 81% of UK adults avoid talking about money.

Enlisting senior stakeholders to normalise conversations about money can go a long way to encouraging people to open up. Doing so can also help your clients understand what matters most to their members.

Look at existing benefits on offer

It can be useful for your clients to look at their existing employee benefits package, because they may find that it offers some financial wellbeing support already. It also gives them the opportunity to plug any gaps.

If they have existing financial wellbeing initiatives in place, are members aware of what’s available? Is it easy for them to find and access? If not, clients should look at ways to boost awareness and visibility.

A good place for them to start is to improve signposting through increased communications – such as a regular newsletter that reminds members of the support available. People can experience financial worry at any time, so by communicating regularly, your clients can increase the chances of providing support when members need it most.

Provide easy-to-understand financial education

Standard Life’s Retirement Voice 2022 research revealed that just 51% of people feel comfortable that they understand financial products. Meanwhile, 50% of people feel overwhelmed by the amount of information on pensions, and 41% don’t know what to do with it.

This suggests that the resources out there are lacking in clarity and not providing information in a way that people can understand or resonate with.

Financial education is key to a person’s overall financial wellbeing, and can help them make confident decisions about their money. So providing members with easy-to-understand financial education should form an essential part of your client’s financial wellbeing strategy.

Keep evolving the strategy

Creating a financial wellbeing strategy isn’t a one-off task. It’s likely that your clients will need to evolve it over time to meet the changing needs of members as they navigate different life stages. For instance, clients should think about how to help members budget their everyday spending, find lost pensions, buy their first home, or plan for retirement.

Ultimately, given the widespread impact of financial worry and the ongoing cost of living crisis, implementing a financial wellbeing strategy is fast becoming a must-have rather than a nice-to-have – so now is the right time to build one.

For more information on financial wellbeing, including resources on how employers can support their staff, take a look at our Financial Wellbeing hub and read our articles.