Fostering greater financial resilience for employees in a post coronavirus world

Guest post authored with thanks to Steve Watson, head of proposition, Smarterly

 

No one could have predicted the deep impact that coronavirus has had. Not being able to see friends and family, the need to work from home and adapt our daily routines around family commitments, not to mention the subsequent economic impact. But, amongst so many other things, the coronavirus pandemic has shown us that having financial resilience, planning ahead and having a buffer for any potential bumps in the road, is absolutely crucial.

 

The current situation means that many people are facing a change in circumstances – whether that’s through illness, unemployment, reduced hours or family members who are currently unable to contribute financially. But for those with accessible savings, the future probably looks a little less bleak.

 

Saving on a regular basis is hugely important, but it’s a difficult habit to stick to. No one could’ve predicted the coronavirus pandemic, and no one can yet say exactly what impact this will have on jobs and businesses in the long run. But if you’ve been saving regularly, you at least have some reassurance that there is money there to fall back on in case the unexpected happens.

 

This is where employers can step in and offer their employees a workplace savings and investment initiative. With 88% of employers stating that they feel responsible for their team’s financial wellbeing[1], offering a savings scheme where employees can save from as little as £10 per month directly from payroll can help foster greater savings habits. Employers can contribute too as an additional benefit offering.

 

We also know that financial worries can have a detrimental effect on mental health. Our recent survey[2] found that 90% of employers agreed that financial worries had a negative impact on an employee’s mental health, while 87% also attributed financial woes to having an adverse impact on an employee’s performance. While this is particularly prevalent across all age groups, employees between the ages of 25 and 35 are more likely to be affected with 74% saying that financial worries have a negative effect on their mental health. It is therefore in an employer’s best interest to help its workforce as best they can to achieve financial stability before it escalates into a far bigger problem.

 

So while non-essential shops are closed, holidays cancelled and many of us staying at home, those who are still working or furloughed may find that they have more disposable income right now and should be making the most of being able to save regularly. While we have the time, it makes sense to start making the most of tax-free savings, such as an ISA, so that when we’re able to start spending normally again, we have a little tucked away for the longer term.

 

Many employers have implemented financial wellbeing programmes over the last few years, recognising the need to help employees put money away for life’s journey. This could be to help get a foot on the property ladder, start a family, manage debt or pay for other short, medium and long term priorities and help save for a more secure future. The key is to ensure that everyone, from low to high earners, has the same opportunities by making such initiatives accessible, easy to implement and transparent.

 

No matter what their age, how much they earn or what their priorities are, employers should help their employees with their financial wellbeing and encourage healthy savings habits via the workplace. Ultimately it boils down to education, tools and choice. This is key to ensuring that employees are able to make informed decisions about their finances and what is best for them.

 

Fostering regular savings habits through a workplace savings scheme can help navigate life’s ups and downs and provide some reassurance that there is money there to fall back on in case the unexpected happens, allowing employees to feel much more in control of their financial situation.

[1] Smarterly research: Realigning the workplace offering to meet the needs of millennials – 2019

[2] Smarterly ‘s Financial Resilience research conducted amongst 2,000 individuals and 1,000 HR Managers – May 2020

 

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