The Money Advice Service (MAS) should deliver a portal and guide to help employers support their employees’ financial wellbeing and resilience with a view to making them more productive, the Financial Advice Working Group (FAWG) has recommended.
A report published today by the Employer Best Practice Sub-Group, which reports into the overall FAWG, identified a clear link between wellbeing and employee productivity, and said a dedicated employer’s portal, that would be hosted on the MAS website, would be the best way to engage employees in improving their financial resilience.
The portal would also explain to employers the full range of employee benefit options available to them, as well as the tax breaks available for different products.
The FAWG was set up by the Treasury and the FCA to consider how employers could provide better support to their employees with respect to managing their personal finances. There are no employee benefit consultants or corporate IFAs on the FAWG Employer Best Practice Sub-Group.
The report also recommends that that MAS should create a simple ready-to-use guide that employers can give to employees, offering tips and tools to make the most of their money.
The report admits that collaboration by government, industry and other key groups will be needed if the portal is to succeed.
In-depth research carried out by the group found employees need help with their financial wellbeing but do not always feel comfortable asking for it. Over half of employers worry about their employees’ financial health, and all employers support some form of financial health measures, even if just the legal requirement of offering a workplace pension.
Seven out of 10 employers agreed that they would point employees to useful information on financial matters if they had access to resources. Some already source information through Google, ACAS, CIPD or their trade bodies. They believe employees are most concerned about debts and managing to keep a roof over their head, and then about their pension.
Fifty-eight per cent of employers would be very or quite interested in a guide to support employees in managing their personal finances. While some employers were concerned initially that such a guide might create additional work or be seen as giving unwanted ‘advice’, their feedback on the actual content was that it was empowering, helpful, and relevant.
Research carried out by the group found that when prompted, employers were interested in supporting well-being but preferred an “arm’s- length” approach, such as signposting existing information that can help employees, rather than more personalised support. 70 per cent of employers would point employees to useful information if they had access to it.
FAWG Employer Best Practice Sub-Group chair Jackie Noakes says: “The work has been guided by a fundamental belief that this is not about creating a burden for business – it’s quite the opposite. We want to provide the tools and clarity that businesses have asked for. It isn’t compulsory, and no business has to spend any additional money if it doesn’t feel able to. If we can help even a few businesses to feel more confident to help their employees then it will have been worth the effort.”
Old Mutual Wealth chief distribution officer Richard Freeman says: “Many people are concerned about money and this can contribute to difficulty in the workplace, according to the findings of the research. So there is a business case for employers to focus on helping staff enjoy financial stability and invest for the future.
“But resource pressures, and concerns about over-stepping the mark and drifting into personalised financial advice, mean some firms feel unable to help staff with their money. This report aims to address that, providing the tools and support that businesses need.
“We now need business to play its part by getting behind this project. It would be fantastic if some pioneering businesses were to become early adopters of the blueprint set-out today, and set an example to other employers across the country.”