We are fast approaching the annual celebration of UK Savings Week and UK Pension Awareness Day. It would be remiss of us not to acknowledge the current financial landscape; where many of your employees are struggling to save due to rising costs of living. Yet, the importance of saving for retirement through pension contributions remains paramount, especially considering the increasing life expectancy and the potential challenges of relying solely on state pensions.
Saving money is a fundamental aspect of financial wellbeing, allowing your employees to achieve their goals – whether that’s buying a home, funding children’s education, or simply building an emergency fund. While short-term savings are essential, it’s equally important to empower your workforce with long-term financial security options such as retirement planning.
In this blog post, we’ll unpack four ways on how your financial wellbeing strategy can be enhanced through savings and pension contributions.
5 proven tips to foster a positive financial wellbeing culture
1. Take control of the short term with budgeting tools
No dreams can be realised without a solid plan in place. A well thought out budget allows employees to take control of their financial situation. Research has shown that people who follow a budget methodology, such as the 50/30/20 rule, save 20% more per month.
Whatever the method you follow, starting a budget can be daunting. One way of making a start on a budget is by using the spending planner tool which every Maji user gets access to. By tracking expenses and following a plan, it’s easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or a home.
2. Think long term with a financial plan
According to BSA, having a savings plan has proven to increase overall life satisfaction and the likelihood to achieve life goals and aspirations. Their recent research showed that 53% of regular savers are ‘mostly’ or ‘completely’ satisfied with their life overall, compared to only 40% of non-savers. It was also found that 82% of those who regularly saved had become homeowners after ten years, compared to only 15% of non-savers. Interestingly, 12% of those who hadn’t saved in the past ten years were behind with their bills, while only 2% of savers were experiencing issues with keeping up with their bills.
By creating a financial plan, you can establish a framework that guides your financial decisions. This enables you to make short-term adjustments without losing sight of your ultimate goals.
3. Build pension savings
As part of your employees’ financial plan, a useful tool to ensure they are saving enough into their pension is through auto-escalation. This tool allows employees to increase their pension contributions automatically from year to year.
Auto-escalation takes the ‘thinking’ out of pension planning, providing an easy way for employees to ensure they are not only consistently contributing to their pension, but also staying on top of the cost of living increases.
4. Keep accountable with 1-1 coaching
Sometimes, a little personalised guidance can go a long way. Our research has shown that employees using a financial coach are up to £295,000 better off by the time they retire. While budgeting serves well as a short-term tactic to managing your finances, a financial coach can assist in creating a long-term financial plan. This would include creating personalised financial plans that accommodate unique incomes, expenses, and financial goals. Coaches also provide ongoing support and motivation to keep your employees on track with their goals.
5. Put more money in your employees’ pocket with salary sacrifice schemes
Salary sacrifice schemes allow you to reduce your taxable income by redirecting a portion of your pre-tax salary towards specific savings goals, such as a pension plan. This not only helps your employees save for the future but also impacts your bottom line in terms of NI savings.
The workplace benefits of financial wellbeing
By implementing these four strategies, you’re not just helping your employees save money; you’re fostering a thriving savings culture within your organisation. The benefits are far-reaching:
- Fewer financial worries: Employees who feel secure about their finances are less stressed and more focused.
- Better productivity at work: Financial stress can significantly impact job performance. By helping employees save, you’re boosting productivity.
- Better work satisfaction: Employees who feel valued and supported, including in their financial well-being, are more likely to be satisfied with their jobs.
Remember, small steps can lead to big changes. By prioritising financial wellness, you’re investing in the overall well-being and success of your workforce.
Ready to help your employees with easy savings and pensions? Click here to schedule your free demo with Maji.
