Employers must help protect staff finances

Employers must help protect staff finances
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Cost of living concerns are weighing most heavily on Britain's youngest working generations, prompting Aviva to urge companies to do more to protect their employees' financial futures. 

In the latest iteration of its Age of Ambiguity study, the life and pensions giant warned that more needs to be done to help generation z and millennials in particular cope with the cost of living crisis. 

The 33-page report, which gathered responses from more than 2,000 UK employees this year, found those aged between 18-25 (generation z) and 26-42 (millennials) were the most concerned over their finances. 

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The rising cost of living, coupled with the increased likelihood of people in these age brackets to be renting or on lower salaries, has augmented their financial stress, the study found.

This could have a direct effect on their savings habits, with 59 per cent of both groups stating that managing their finances is 'out of my control', and growing numbers of people saying the financial stress they are under is affecting their ability to function well in the workplace.

As more people find they are no longer able to save, the fear is that many people will stop pension contributions - borrowing from their tomorrows in order to meet today's demands.

  • 34 per cent say they are only just getting by financially
  • 81 per cent of women are concerned about their finances
  • 44 per cent do not know if they will have enough to live on in retirement.

Earlier this year, FTAdviser reported that approximately one in 10 savers have cut back or stopped contributing to their pension as a result of stagnant wages and inflation.

To prevent employees getting into a worse pecuniary state, Aviva has suggested that employers should do more to help prevent financial stress.

Dr Doug Wright, medical director at Aviva UK Health, said: "In these challenging times, employers need to be closely attuned to their employees’ financial wellbeing, signposting help for those who need it but are unsure of where to find it.

"Employers should look to offer support that bolsters employees’ confidence, as well as offering practical solutions that appeal to their full breadth of employees."

According to Aviva, solutions could include: 

  • Providing workplace events, such as budgeting seminars, and financial education
  • Offering a salary sacrifice scheme
  • Providing better signposting to agencies such as the Money and Pensions Service
  • Improving the take-home pay by ensuring a fair minimum wage 
  • Providing access to confidential chats on debt or mental wellbeing
  • Provide free or subsidised one-to-one access to a financial adviser. 

Dr Wright added: “Workplace education campaigns about personal finances, including credit ratings and budgeting, can be a great way of helping people feel more secure with their monthly pay cheques."