The conversation about Financial Wellbeing has evolved. As the cost of living crisis continues its grip, affordability remains a challenge for many households but employers are increasingly looking beyond short-term support towards building long-term financial resilience.
This shift comes as the government, via Sir Charlie Mayfield’s Keep Britain Working review, places greater emphasis on keeping people healthy and economically active. Increasingly, employers are recognising that Financial Wellbeing is no longer ‘just’ a benefit; it is central to workforce resilience, productivity and wellbeing at an organisational, but also national, level.
Alison Scowen, Head of Public Affairs (Life Services) at the Co-op Group, who is “encouraged” by Mayfield’s work, has seen this evolution first-hand. She explains that in recent years the cost of living has become the “dominant lens through which” the Coop has viewed Financial Wellbeing. The employer has built up a “better” evidence base around saving, based on regular conversations and insight activities with its employees.
Financial resilience for a more productive workforce
“So now we’re talking more about helping people build financial resilience,” she says. “And we’re now better at recognising the role employers can play in supporting Financial Wellbeing and the commercial benefits of a more productive financially well workforce.”
Michelle Sutton, Board Director at the Chartered Institute of Payroll Professionals (CIPP), and Head of Compensation and Reward at Suez Recyling and Recovery, agrees that the focus has fundamentally changed:
“Yes; the conversation has shifted significantly. Cost of living support was an important catalyst, but employers are now recognising that financial resilience is fundamentally a workforce stability issue. When employees have no buffer, financial shocks quickly translate into stress, distraction, sickness absence, and even attrition.”
That growing recognition reflects a broader change in thinking. Money worries are no longer viewed simply as a personal employee issue; they are increasingly understood as business critical.
The productivity connection
For many employers, the business case for investing in Financial Wellbeing is becoming impossible to ignore.
Co-op’s own colleague research has demonstrated the close relationship between financial security and overall wellbeing. Research among employees has clearly shown that financial worries can be a significant source of stress and impact on mental wellbeing, which is a measurable cause of absence.
Scowen says:
“It’s our position that Financial Wellbeing should be viewed as part of wider colleague wellbeing. Half of colleagues that engage with our financial wellbeing offer via Stream report being less stressed and improved sleep. Both of which contribute to at work productivity.”
Similar findings are emerging across sectors. At Suez UK, payroll savings participation has consistently been associated with lower sickness absence, shorter periods away from work and significantly fewer long-term absences.
For Dr Tracey Leghorn, Chief Business Services Officer at Suez UK, the findings reinforce what she has observed throughout her career:
“Financial wellbeing has an exponential effect on overall holistic wellbeing. When people feel financially secure, the impact goes far beyond work.”
The Money and Pensions Service (MaPS) also points to a growing body of evidence supporting that link. Research has found that financial distress contributes to lost sleep, anxiety, difficulty concentrating and poorer decision-making, all of which reduce employees’ ability to perform effectively. Separate research has also shown that more than half of employees have experienced financial difficulty, while over half say financial pressure affects their performance at work.
Financial wellbeing is about more than salary
Although discussions often focus on low pay, interviewees stress that Financial Wellbeing is not simply determined by income.
Patrick Leavey, UK Financial Wellbeing Strategy Programme Lead at MaPS defines financial wellbeing as “feeling secure and in control”; “being able to manage everyday finances, cope with unexpected costs and remain on track for a healthy financial future. “it’s about making the most of your everyday money, managing the unexpected, and being on track for a healthy financial future”.
Crucially, he says Financial Wellbeing is not defined by how much someone earns, but by how well equipped they are to manage everyday spending, plan ahead and deal with financial shocks.
That means employees across all salary levels can experience financial stress, albeit for different reasons. While lower-paid workers may struggle most with day-to-day affordability, middle earners increasingly face pressures from housing costs, childcare, debt repayments and financial uncertainty.
Some employees more at risk
Research also shows that some groups experience consistently lower levels of financial wellbeing than others. According to MaPS’ MoneyView research, younger adults report significantly lower financial wellbeing than older age groups, with those aged 18 to 24 experiencing the lowest levels. The research also found differences across ethnic backgrounds, highlighting the importance of understanding the particular needs of different workforces rather than adopting a one-size-fits-all approach.
For younger employees, the most constructive conversations may centre on budgeting, rent, debt management and building emergency savings. For employees approaching retirement, the emphasis may shift towards pensions and longer-term financial planning. Recognising those differences is becoming an important part of effective inclusive Financial Wellbeing strategies.
From information to meaningful support
As employers become more sophisticated, the emphasis is also changing from simply providing financial information towards creating practical support that helps employees build confidence and resilience.
Sutton believes employers are uniquely placed to make a difference because they influence two of the biggest touchpoints in employees’ financial lives:
“Employers are uniquely positioned to influence Financial Wellbeing because they control the two things employees engage with most frequently:
- Pay (extremely emotive, especially if it goes wrong)
- Payroll systems (employee self service)”
(Sutton is heavily involved in the new National Coalition for Workplace Savings, which promotes payroll saving schemes. The topic of this coalition will be specifically covered in a future feature soon.)
Alongside growing interest in payroll savings and automatic workplace saving initiatives, many organisations are investing in more personalised guidance. MaPS’s Leavey predicts that as Financial Wellbeing becomes “a hygiene factor” – an expected benefit rather than a ‘nice to have’ one – employees will demand this more personalised approach and employers will have to invest time in understanding the different needs of the workforce:
“Employers will become more sophisticated in understanding the financial concerns and needs of their employees by using their own polls, surveys and discussion groups, or through third-party evidence from trade bodies”.
He also predicts that support will become “more akin to coaching than education” and that AI will be embedded into tools and services:
“This will allow employees to ask questions, understand products better, and build their confidence and financial capability.”
A strategic workforce issue
Looking ahead, interviewees believe Financial Wellbeing is becoming integrated into wider people strategies rather than sitting alongside them as a standalone benefit.
Sutton identifies three trends shaping the future:
- Normalisation of payroll saving: automatic enrolment will become standard, not exceptional
- Integration with wellbeing and safety strategies: financial resilience will be recognised as a core driver of attendance, engagement and safe working
- Evidence based decision making: employers will increasingly use data to track financial engagement, absence patterns, and retention outcomes
“Ultimately,” she says. “Financial wellbeing will shift to being seen as a strategic workforce lever.”
That sentiment neatly captures how far the conversation has moved.
The cost-of-living crisis may have prompted employers to act, but the focus is now much broader. Financial Wellbeing is no longer simply about helping employees get through today’s challenges. Increasingly, it is about giving employees the resilience to face tomorrow’s and helping organisations build healthier, more productive and more sustainable workforces in the process.
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