Almost half of corporate defined contribution plan sponsors in the U.K. do not have a financial well-being strategy in place for plan participants, even though 88% of the surveyed employers are concerned about their employees' financial struggles, according to a Barnett Waddingham report. (Registration required.)
In the study, the U.K.-based DC consultant, surveyed 200 employers, finding that 30% of them still have no plans to introduce a financial wellness strategy.
In addition, 84% of employers said they see the need for financial education and guidance among employees, but less than 40% of employers provide it.
Even though U.K. companies believe a financial well-being strategy will help optimize the performance of their workforces, barriers such as cost associated with implementing such strategy prevent employers from putting one in place.
For 61% of the surveyed sponsors, cost was the main obstacle, followed by 33% of sponsors that said return on investment was a key concern. Only 19% of employers said convincing the board was a barrier.
Barnett Waddingham also studied the financial priorities of employees who would be covered by a holistic wellness strategy. The survey found that 43% of employees prioritized the cost of housing as the main expense in financial planning, followed by 42% who said daily living expenses was the main cost. Building a retirement savings account was their third priority at 37%, ahead of managing personal debt at 30%, the survey said.
"Companies are struggling to implement the right level of financial well-being support and provisions. Obtaining board-level buy-in is a priority for human resources and pension managers, but proving the value of having a well-thought-out financial well-being strategy which provides a tangible return on investment is key to this," said Paul Leandro, partner at Barnett Waddingham, in a news release about the survey. "Until financial well-being enters the board-level agenda, and overarching strategies are agreed and monitored, employees will continue to receive employer paid benefits that are not effective at helping them with the financial issues they face today."