As the cost of living crisis continues, worries over financial wellbeing can have a big impact on employees’ overall wellbeing, which in turn can affect their satisfaction and productivity at work and even their health. There are, however, things employers can do to support employee financial wellbeing that go beyond a pay rise.
Background
The Money and Pensions Service (MaPS) defines financial wellbeing as feeling secure and in control over money. It is being financially resilient, confident and empowered to make the most of your money, deal with unexpected events and plan for a financially healthy future.
Practical guidance on money, pensions and future planning is an important part of this and with the changes announced in the Budget to salary sacrifice and pensions, this is something employees are going to need soon. Being confident in using the support available is an important part of financial wellbeing and there are ways employers can facilitate this.
1. Be fair and transparent with pay decisions
In the CIPD’s Labour Market Outlook from autumn 2025, it was revealed that amongst employers looking to increase, decrease or freeze pay in the next 12 months, the median expected basic pay increase for the next 12 months remains at 3% overall for the sixth consecutive quarter. Whilst this hasn’t changed for some time, there is evidence of a downward shift among many employers in planned pay awards levels. Compared to 12 months ago, when 34% of employers planned to offer a pay rise of 5% or more, only 21% of employers were found to have that intention this quarter. Instead, 30% of employers (which has risen from 21% 12 months ago) intend to offer pay awards within the 3–3.99% range.
Whatever the organisation is considering for pay award levels, being fair and transparent with them is essential in maintaining employee trust and confidence and supporting employee financial wellbeing. Having clear links between pay awards and organisational performance helps employees to understand the reasoning behind pay decisions, especially when they are less than expected.
2. Get the basics right
Getting basic pay right is fundamental to employee financial wellbeing. Pay should be consistent and predictable and failing to pay employees all they’re owed is a breach of contract and risks damaging the trust and confidence in the employment relationship as well as being disruptive to an employee’s financial security.
In the latest round of naming and shaming by the Government, published October 2025, of employers who had not paid the National Minimum Wage and National Living Wage, 15% (103) had failed to pay for all working hours. The reasons employers gave for this were varied and included:
- failing to pay for the time spent working before and after a worker’s shift and time spent in mandatory training
- rounding clock-in time to the nearest hour (half hour or five minutes)
- paying for “regular” hours or a set day rate when the worker worked for more time
- failing to pay a salaried-hours worker an additional amount when they worked more than basic hours.
These issues, however, can be avoided by keeping accurate records of employee working hours and establishing appropriate checks and balances to ensure they are paid the money they are owed.
Another aspect of getting the basics right is reviewing how expenses are managed. If it takes time for expenses to be approved, or there is a lengthy and complex process to do so, this can negatively impact employees who may need the money for other important payments. Making sure this process is streamlined and as easy as possible will help employees who are required to incur costs during their work feel more relaxed about doing so and more confident in their ability to manage their day-to-day finances.
3. Communicate what support is available
Clearly communicating internal and external support, such as providing access to financial education and guidance, can help employees to assess what they have and how they can make smart financial decisions to secure their future, which is central to financial wellbeing.
This could be achieved by providing access to company equipment outside of working hours to attend online training or for research or by inviting speakers specialising in financial assistance to talk to employees. It could also come in the form of access to an Employee Assistance Programme (EAP) that offers guidance and information on financial issues.
4. Be flexible
Flexibility in working hours and locations that allows employees to better manage their commuting costs can also benefit employee financial wellbeing. This can be achieved by allowing travel outside of peak hours, permitting some remote or homeworking or inviting homeworkers into the office where they are finding their home environment difficult to manage.
5. Supporting alternative commutes
Encouraging employees to think about alternative commutes can benefit them beyond financial wellbeing. Cycling or walking to work comes with physical as well as financial benefits. Helping employees to organise themselves to do this together encourages socialisation and helps them to feel safe whilst doing so.
A cycle-to-work programme can help manage the costs for those who don’t already have a suitable bike. Making sure there is adequate and secure storage for bikes whilst employees are at work and washing and/or changing facilities to change into office attire once at work can help employees feel more confident about changing the way they travel to work.
Where walking and cycling is not an option — many people already have a long commute by car or must make stops on the way to and from work, such as to childcare and school pick-ups and drop-offs — carpooling and lift sharing could be. Employers are in a good position to help employees arrange this amongst themselves. This will help employees to cut costs as well as socialise, providing mental and financial benefits.
Next steps
Financial wellbeing is an important part of an employer’s overall wellbeing strategy and taking active steps to support employee financial wellbeing brings with it many benefits. It doesn’t have to be expensive — there are measures that are free or relatively cheap that an employer can deploy.
Please get in touch if you would like to discuss how to support your employees financial wellbeing further
