Employee ill health linked to low savings
Rachel Muller-Heyndyk, October 08, 2018
A third of UK employers (34%) think that employees' high stress levels are a consequence of not having enough savings, according to Close Brothers
Its Business Barometer report found that a further 25% of employers have seen employee health issues arise due to money worries, and 14% have seen higher absenteeism for the same reason.
Just 17% of employers think their staff's poor financial management has no impact on the business.
Despite these beliefs 47% of UK businesses neither offer financial education to staff nor plan to do so. A mere one in five businesses provide financial education to their workforce and, of those, 14% describe the service they offer as ‘limited’.
However, the research suggested this may be set to change. Thirty-six per cent of employers do not currently offer financial education, but plan to start doing so in the next three years. SMEs with 11 to 60 employees are most likely to fall into this bracket, with 50% claiming to have plans to introduce a financial education programme over the next three years.
Financial education programmes were most commonly delivered via individual face-to-face meetings, with 37% offering this method, followed by 35% providing group face-to-face conferences and workshops, and 25% Web-based seminars. A further 26% include email education in their programme, and 23% use an online platform. Less popular methods include post (9%) and text messages (4%).
Those who offer financial education do so for a variety of reasons, researchers said. Employers see it as a valued employee benefit (40%), a way to improve employees’ financial wellbeing (37%), and part of the business’ people strategy (33%).
These findings come as separate figures from the Office for National Statistics last week revealed that more than half of people (53%) aged between 22 and 29 have no savings.
Jeanette Makings, head of financial education at Close Brothers, said that employers are in a strong position to offer financial support to their employees.
"It’s clear that employees are not saving enough, nor are they saving in the most effective way. This is true for both short- and longer-term financial planning, including pensions,” she said. "Employers are perfectly placed to help their workforce become more confident and competent in financial decision-making, in turn having a direct impact on their financial, physical, and emotional wellbeing."
She added that the provision of financial education would benefit both employees and businesses.
"Those who receive financial education find it useful in guiding their immediate, medium, and long-term saving decisions. This then frees up employees to be happier, healthier, and more productive at work. As such, having a comprehensive financial education strategy is a win-win for employers. It could even go some way towards solving the UK’s productivity puzzle,” she said.
The Business Barometer is a quarterly report commissioned by Close Brothers Asset Management, which surveys 900 employers across the UK.