Employee benefits have failed to evolve and are failing employees’ needs for financial wellbeing, according to a report from wealth and investment manager Close Brothers.

In a new study, the investment and advice firm warned that financial wellbeing was way down the priority list for many companies.

The research revealed that the top issue currently facing employees was being able to keep up with living costs, at 36%.

Meanwhile 35% of respondents said they were worried about not being able to afford to retire and 32% were worried about managing mortgage and rental costs.

However, the priorities come way down on corporate agendas where supporting staff with their cost-of-living issues is eighth on the list and financial wellbeing is twelfth.   

Jeanette Makings, head of workplace financial wellbeing at Close Brother, pointed out that the events of the last three years, “wrought a seismic change on working patterns and household finances.”

She said the pandemic saw people take stock and focus on their lives, which also brought a reappraisal of their finances, leaving them recognising the importance of an emergency fund and wider financial protection for their family. It also prompted an increase in hybrid working, which saw people move house or change their lifestyle.  

Ms Makings said: “It is increasingly clear that workplace benefits and financial wellbeing programmes have failed to keep pace with these shifts.”

She said employers should make changes to their workplace benefits and wellbeing programmes to better align them with employees’ needs.

The report showed that relatively few employers offered benefits that employees have said could make a real difference to their finances. It said there was a mismatch between what employers were offering and what employees needed.

For example, neither season ticket loans and cycle to work schemes feature on the employee wish list, yet they are offered by 33% or 55% of companies respectively. The two benefits have become much less relevant with more people working remotely. 

The benefit mismatch 

Source: Close Brothers research

The two areas where employees and employers aligned were pension and death in service benefits.

The research showed a clear advice gap with 43% of employees saying they would value pensions advice and 36% stating they would like financial advice even though few companies offered it. Just 22% provide financial advice with a pension provider as part of their retirement planning support and only 15% of companies provide financial advice.  

Source: Close Brothers research