(PlanAdviser) - Despite the financial stressors affecting Americans, 53% of employees say their employer has not offered additional financial wellness benefits or compensation in response to rising prices, according to data collected in January by FinFit.
The same percentage, 53%, of people with retirement savings, said they don’t know if it will be enough to retire on.
One reason for the uncertain financial future is that those funds were needed on a more urgent basis in a turbulent 2022. Almost one-quarter of participants (22%) borrowed from retirement savings in the past year, with 64% saying it was their least expensive loan option. Not surprisingly, 62% are nervous that inflation will affect their retirement savings and/or timing to retire.
Meanwhile, 38% reported they are not contributing enough to their retirement savings, and another one-quarter plan to reduce their contributions.
“Many working Americans are at a crisis point when it comes to their personal finances,” the report stated. “With inflation reaching historic highs throughout 2022, the rising costs of everyday expenses has made it difficult, if not impossible, for people to build their savings and avoid going into high-cost debt.”
In response, the FinFit summary recommended an increased investment from employers could help their workers cope.
“We believe that holistic financial wellbeing programs—ones that support emergency savings, inclusive access to earned wages and affordable loans, as well as wrap-around financial resilience programs including coaching and education—will lead the efforts to close the benefits gap,” FinFit stated.
The firm also suggested other financial well-being benefits, like salary-linked loans and early wage access, in the hopes that employers are becoming more open to offering benefits that tackle high-cost debt, variable cash flow and lack of emergency savings.
Employees seemed to share that hope, as 68% expressed interest in an employer-sponsored savings product, and 47% were interested in a low-cost loan available through their workplace.
FinFit calculated what it termed an employer net promoter score to help employers measure employee satisfaction. It has found that, on average, employers who provide financial wellness benefits see an NPS more than 2.4 times higher than those who do not.
The report, “Inside the Wallets of Working Americans: The 5th Annual Report from Salary Finance,” was conducted in January, surveying 2,000 working Americans.
By Natalie Lin
May 1, 2023
