The Financial Conduct Authority’s (FCA) latest ‘Financial Lives Survey’ provides valuable insights into financial well-being and the challenges faced by UK consumers. It explores key areas such as the cost of living, financial resilience, pensions, and the impact of financial pressures on mental health.
As of May 2024, notably 24% of people in the UK were suffering from low financial resilience, while nearly half (49%) of UK adults displayed at least one characteristic of vulnerability. Similar to the FCA’s 2022 survey outcome, this highlights that UK consumers continue to struggle with managing their finances.
The FCA aims to boost transparency and trust in financial services, helping consumers make confident money decisions, like saving for retirement and exploring investments. What were the survey’s key takeaways, and how can we offer support to you and your employees?
We review the key findings and show how our practical strategies can empower your employees and enhance their financial well-being. The data highlights where we can work with employers to provide support that makes a meaningful difference.
Boosting financial resilience
The FCA’s survey demonstrates some of the widespread challenges consumers are facing, when trying to improve their financial health. These challenges often contribute towards low financial resilience and act as major obstacles to financial well-being.
Indeed, the survey reveals that 24% of UK adults have low financial resilience. This includes difficulty saving, feeling burdened by bills, or missing multiple payments. Specifically:
- 14% (7.6 million) had low savings.
- 8% (4.5 million) were in financial difficulty, missing at least three bill payments in six months.
Low financial resilience can cause employee stress, reduced focus, and missed payments like insurance or pension contributions. We support you and your employees by offering financial wellness programmes and access to tools to encourage savings and better money management. We review the feedback from our users, so that the tools are engaging and easy to use.
Low financial capability and confidence
People with less money often struggle to access and understand investment products. Although trust in financial services has remained stable since the previous survey, only 8.6% of people in the UK have received formal advice on investments, pensions, or retirement planning in the past 12 months.
As a result, many employees may not fully understand financial products, including workplace pensions. Data from the FCA shows that 59% of adults experience challenges managing their finances:
- 22% lack confidence in handling financial matters.
- 36% have low financial knowledge.
We can support your employees by providing access to:
- Personalised financial guidance, such as webinars or one-on-one advice sessions.
- Providing simple tools, like pension calculators, so employees can plan with greater confidence.
Our Content Hub provides resources to boost financial awareness and engagement at work, while the Workplace Workout programme offers actionable steps to improve employees’ financial well-being. Education empowers employees to help them understand their financial needs and achieve their goals.
Being retirement ready
According to the FCA’s latest survey, one in ten adults have no cash savings, whilst one-third of adults with a Defined Contribution (DC) pension have less than £10,000 in it. We can conclude that the survey highlights significant gaps in being retirement ready, which the data supports:
- 31% of non-retirees have not considered how they’ll manage financially in retirement.
- 22% of non-retirees don’t understand their retirement options.
Disengagement could be a key contributor to such under-preparedness. The picture has slightly improved since 2022, but issues still remain on understanding longer-term financial planning:
- 33% have thought very little about retirement.
- Only 20% carefully consider how much to contribute.
Fidelity aims to directly help employees prepare for retirement, by simplifying pensions and making them easier to manage. We do this by offering a range of calculators and webinars for working individuals who are looking to save more effectively for their retirement. Our calculators aim to educate and engage and can provide users with tips to help to improve their financial well-being or actions to help to address any retirement savings shortfall in order to meet their target lifestyle in retirement.
Mental health and financial well-being
Financial stress is increasingly common, with 22% of adults feeling overwhelmed by their financial situation - which jumps to 40% for those in debt. This strain can often affect employees’ ability to focus and perform effectively at work.
Employers can play a pivotal role in addressing this issue through employee assistance programs (EAPs) that blend mental health support with practical money management tools. Offering financial education workshops and counselling sessions that empower employees to take charge of their finances.
These programs help individuals build essential skills, such as budgeting, saving, and understanding investment opportunities. Organisations that prioritise such initiatives not only enhance employee satisfaction; but also contribute to a more productive and engaged workforce.
Building confidence in financial services
Only 39% of adults feel confident in the financial services industry, which can create challenges when encouraging employees to engage with financial planning. Partnering with trusted providers like Fidelity, who prioritise transparency and support, can help bridge this confidence gap.
By fostering clear communication and providing accessible educational resources, companies can empower employees to make informed decisions about their financial futures. We provide a range of support services to help you promote financial planning in the workplace, including webinars, posters, intranet content, and digital tools.
Supporting employees’ financial journey
At Fidelity, we are committed to helping you to support your employees with workplace savings to enable progress towards financial wellness and retirement income. Based on the FCA’s findings, there are several actionable steps that employers can take to support their employees’ financial well-being:
- Educate employees on financial basics through tools and webinars.
- Encourage pension engagement with clear, jargon-free updates.
- Provide access to expert advice to help employees make informed decisions.
- Offer targeted support, such as financial wellness initiatives tailored to employees’ life stages.
At Fidelity, we provide employers with interactive tools and financial wellness insights to help employees secure their financial future and access through workplace savings into Fidelity Personal Investing accounts, including ISAs and Lifetime ISAs.
Taking the next step
Employees with financial confidence experience less stress, better mental health, and higher productivity. Fidelity offers tailored resources to meet your workforce's needs - personalised financial planning tools, webinars and insights.
Building a stronger financial future for your employees can drive positive results for your organization. Ask us how Fidelity’s expertise and resources can help you support your employees.