Article How do your employees feel about money, work and pensions?

The economic climate has undergone significant changes in recent years, prompting many people to re-evaluate their priorities and attitudes to work, life and money. As an employer, having a deeper understanding of what your employees might be thinking and feeling could allow you to support them more effectively. By empathising with and actively addressing common concerns and challenges, you can help your employees and potentially limit any negative impact on your business.

This article shares research from a variety of studies, focusing on employee views on money, work and pensions. We’ll outline what this might mean for you and share considerations for addressing these concerns.

6 insights on how employees feel about money, work and pensions:

1. Basic living expenses remain a top concern
2. Not all employees are aware of their benefits
3. People want more autonomy at work
4. Funding retirement is a worry for many
5. Employees aren’t being proactive in retirement saving
6. Some people feel underpaid compared to their peers

1.  Basic living expenses remain a top concern

The cost of living crisis has been high on the news agenda in recent years. While our Financial Priorities survey revealed that 52% of adults felt positive about their finances going into 2024, paying for basic living expenses is still the top priority for 37% of people.¹ The survey also highlighted that 34% were forced to use their savings for everyday items and emergency spending.¹  

If your employees are struggling to cover basic expenses, it could lead them looking elsewhere in search of higher pay. 34% of people looking to switch jobs in the next 12 months said it was because of pay and working conditions according to the CIPD Good Work Index 2023.²

Financial stress can negatively impact your employees’ mental health and productivity. It’s one of the leading causes of absenteeism and presenteeism in the workplace. While a pay rise might not always be possible, there are other actions you could consider to support your employees:

●      Flexible working arrangements might allow them to cut down on travel and childcare costs.

●      Offering discounts across a range of retailers, like supermarkets, could help employees make savings on their everyday expenses. Companies such as Reward Gateway and PerkBox are examples of this type of benefit.

●      Financial counselling services can also help your employees feel more in control of their money. The Money and Pensions Service offers a range of initiatives to support them.

●      Assistance with childcare is also offered by some employers and could be a meaningful way to make employees feel appreciated.

2.  Not all employees are aware of their benefits

The CIPD Reward Management survey found that just 57% of people were told about the benefits available to them by their employers. And only 53% were told how to access them.³ The results indicate that many people could be missing out on initiatives that could help their mental, physical and financial wellbeing. Better awareness and uptake could potentially improve employee performance and retention.

Awareness is key, so think about new ways to communicate your benefits scheme. For example, having a new starter pack that details the available benefits could be useful and easy to put together. Regular internal communication on existing benefits could also be helpful for staff whose circumstances have changed.

3. People want more autonomy at work

An LSE study of 100 employees in the UK found that 51% highlighted the benefits of having autonomy over their working day.⁴ Specifically it was credited with helping them to improve their productivity and wellbeing. It was also linked to a better work-life balance. Autonomy empowers employees to design a workday that supports their productivity and personal wellbeing. For example, this could involve taking half an hour to pick up their children and then recuperating that work time at a more suitable moment.

As the study shows, dictating how and when your employees work could be detrimental to their productivity. It could also decrease their motivation, confidence and wellbeing. Offering employees a degree of freedom over how they structure their working day – and publicising this – could improve staff retention and attract new talent. 

4. Funding retirement is a worry for many

Our Pension Auto-enrolment research revealed that 47% of people are worried they won’t have enough money when they retire.⁵ The cost of living has also caused some to reconsider how they access their pension. Our Financial Priorities survey found that 28% of those over 55 and still in employment say that they’ve considered accessing their pension funds earlier than planned. 14% have already started using their pension funds before they were planning to.¹

On top of the impact on their mental and physical health, employees under financial pressure may also face increasing debts, depending on their circumstances. As an employer, you’re able to help employees develop positive savings habits. You could encourage pension saving by offering a contribution matching scheme above the minimum requirements. You could also consider a salary sacrifice scheme to help employees boost their pension pot without reducing their take-home pay.

For information on how to build employees’ connection with their retirement savings, read How to engage your employees with their pension.

5. Employees aren’t being proactive in retirement saving

Despite employees being worried about retirement, our Auto-enrolment research found that 48% of people are less inclined to take any action on their workplace pension because they believe it’s done for them.⁵ Because auto-enrolment is in place, many employees believe that the default contribution rate of 8% is enough for retirement when it might not be.

While the impact of this isn’t immediate, in the long run it could turn into a financial concern. Both your employees’ mental health and their standard of living at retirement could be negatively affected if they haven’t saved enough.

Raising awareness is crucial here. Point your employees towards resources that could help them calculate how much they need to save, such as our Pensions health check guide. Additionally, you could host an open day at work with a specialist adviser who can provide tailored advice. This won’t only help your employees to understand how much they might need, but also the best way to do it.

We offer advice and toolkits to help you engage your employees with their pension on our Engaging your employees page.

6.  Some people feel underpaid compared to their peers

According to CEBR’s Financial wellbeing & productivity in the workplace report, 63% of UK adults felt underpaid compared to their peers.⁶ This kind of social comparison can be detrimental to our wellbeing, particularly as people are more likely to compare themselves to those who appear better off. This could lead to employees feeling undervalued, impacting how well they work with their colleagues, and whether they want to stay within their job.

You could address this by considering ways to be transparent across your hiring process. For example, advertising clear salary brackets for particular roles or making sure you benchmark salaries against industry-wide rates. The gender pay (and pensions) gap is also an issue many employees might be aware of. If your business has more than 250 employees you’re already required to report your gender pay gap data, but advertising the data and what you’re doing about the gap could help to show your authentic commitment to closing it. For companies with fewer than 250 employees, voluntarily publicising this data could do the same.

Creating a positive work environment

The needs and expectations of your workforce will vary significantly depending on their circumstances. This article aims to outline some of the concerns and aspirations they might have about their work, finances, and retirement. As an employer, you can foster a better working environment by paying attention to these nuances and offering the relevant support where possible.

With absenteeism and presenteeism on the rise, employers should recognise they have a role to play in supporting their employees to be more financially resilient. In the long run, this might not only help your employees become more productive and motivated, but could also help you retain and attract top talent.

To read more about how to do this, read Help your employees become financial wellbeing all-rounders.