"Many employees feel overwhelmed and discouraged about their financial situation, which is affecting overall wellbeing."
- Helen Gilchrist, Head of Defined Contribution at WTW
Of those surveyed (6,000), 89% of employees are worried about paying for basic living costs, with four in ten extremely worried about the costs they could face. The majority of employees were concerned about food costs (77%), followed by housing (71%), transportation (71%), and interest charges (66%). Notably, the number of employees living pay cheque-to-pay cheque has risen by 4% since 2022, while the number of employees who said they were worse off financially has almost doubled (24% vs 40%) since 2019.
Nearly half of employees (45%) aren’t on track with their finances and over a quarter (28%) expect their financial situation to worsen over the next year. 59% of employees think money worries have negatively impacted their overall wellbeing – this has led to higher levels of stress and anxiety in the workforce.
Inflation has also dramatically affected employees’ retirement confidence and savings with nearly four in ten (39%) workers aged 50 or above expecting to be in employment at the age of 70. This is a 27% rise since 2022, and 31% before the Pandemic. Furthermore, 79% admit they’re not saving as much for retirement as they should be, and less than half (47%) are on track for retirement.
WTW found a significant gap between the financial wellbeing support employees want from their employer and the priority employers place on financial wellbeing initiatives. This reflects similar findings reported by Group Risk Development (GRiD) earlier this month.
READ MORE: GRiD finds only 49% of organisations consider benefits that support the entire workforce
“High inflation combined with the aftermath of a once-in-a-generation Pandemic is causing many employees to feel overwhelmed and discouraged about their financial situation, which is affecting overall wellbeing. Employers should take action to improve financial wellbeing within their organisation: adequate education for employees to help plan their resources and close financial gaps, as well as connecting employees with relevant elements of their total rewards package,” explained Helen Gilchrist, Head of Defined Contribution at WTW.
She said: “Employer retirement programmes, and specifically defined contribution plans, remain the primary path for employees to save for retirement. With challenges meeting their day-to-day expenses while still planning for retirement, employees are looking for help from their employers to build a retirement nest.
“Employers have an opportunity to align their focus with employee value, cost pressures, and talent objectives to address how their benefit programmes align to retirement and financial wellbeing initiatives,” Helen concluded.
