Why employees do not fully understand workplace benefits and what employers can do about it

Why employees do not fully understand workplace benefits and what employers can do about it

Research from the CIPD shows many employees do not fully understand the workplace benefits available to them. Better communication and financial education can improve engagement, productivity and staff retention.

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Why Financial Wellbeing Education Matters for UK Employers and Their People

Employers across the UK know that supporting their people goes beyond paying them. That much is obvious. But what’s less obvious, and what two major studies published this year lay bare, is just how few organisations have actually done anything structured about it.

The CIPD’s Reward Survey: Focus on Employee Benefits (2026), which gathered responses from over 1,000 HR and reward decision-makers, found that only 15% of UK organisations have a formal financial wellbeing policy or strategy. Fifteen per cent. That means the overwhelming majority of employers are, at best, offering piecemeal support and hoping it lands.

Separately, research by Hymans Robertson surveying 500 corporate finance and pensions decision-makers, found that nearly 40% of employers offer four or fewer types of financial support, with no plans to do more. And here’s the kicker: 61% of employees said better financial support would make them more likely to stay. That’s a retention problem hiding in plain sight.

The gap between intention and action

It’s not that employers don’t care. The CIPD data shows that 77% of organisations have objectives for their benefits package. Retention tops the list (44%), followed by motivation and engagement (37%) and improving productivity (31%). The intent is there.

But intent without follow-through doesn’t help anyone. Among those employers with objectives, 15% don’t bother checking whether their benefits actually meet them. And only a third of those who do review say their benefits fully deliver. In the public sector, that drops to one in five. In the voluntary sector, roughly the same.

There’s also a telling mismatch between what employers recognise as effective and what they actually offer. Take flexible working: 75% of organisations with benefits objectives say it supports those objectives. Yet only 40% provide it. Employee assistance programmes tell a similar story: 31% say they’d support their goals, but just 10% offer one. Time and again, the research shows employers acknowledging the value of something and then not providing it.

Money worries aren’t just a low-income problem

The CIPD’s 2025 Good Work Index put a number on something many HR professionals already suspected: 31% of workers said money worries had negatively affected their work performance. Among those earning under £20,000, that figure was 38%. But it’s not confined to lower earners. Nearly a quarter (23%) of workers earning over £60,000 said the same.

Financial stress shows up as absence, as presenteeism, as people sitting at their desks unable to concentrate because they’re worried about a bill or a debt or whether they’re putting enough into their pension. A CIPD review of the academic research confirms what most of us would expect: money worries reduce focus, productivity and output, whether the person comes into work or not.

Despite all of this, only 39% of organisations feel any responsibility to point their employees towards sources of financial information or guidance. For large private sector employers, that figure reaches 80%. For SMEs, it’s far lower. Some of this reluctance likely comes from confusion about the line between financial guidance (not regulated) and financial advice (regulated). But whatever the reason, the effect is the same: employees are left to figure things out on their own. Many turn to social media or other unregulated sources - and as separate research by Bippit found, almost two in five UK employees have followed financial guidance that ended up hurting them.

Benefits without understanding are benefits wasted

This is where the argument for education becomes difficult to ignore. Workplace pensions, salary-sacrifice arrangements, contribution matching, savings schemes, etc., can all make a genuine difference to someone’s financial future. But only if the person understands what they’re being offered.

The Hymans Robertson study makes this point sharply. It found that most employers focus their financial wellbeing investment on low-cost options like discounts and webinars. Employees, though, want something more substantial: personalised support, proper guidance, and help with things like emergency savings. There’s a mismatch between what’s being delivered and what would actually move the needle.

Pensions are a good example. Hymans Robertson found that 84% of employers set default employee contributions at 3–5%, and two-thirds have a default total saving rate of 10% or less. Three-quarters offer matching or incentive-based contributions (which is positive) but a quarter still offer only a flat or non-contributory rate. These are decisions with long-term consequences, and many employees don’t fully grasp what changing their contribution level could mean for their retirement.

The CIPD data backs this up from the other direction. Organisations that do have a financial wellbeing strategy are far more likely to offer pension contribution matching (34% versus 13% without a strategy), free financial education or guidance (21% versus 6%), and training to help employees increase their earning potential (34% versus 15%). Strategy drives provision, and provision drives outcomes. But the whole chain breaks down if employees don’t understand what’s on the table.

Why this matters even more for SMEs

Small and medium-sized businesses face a particular version of this challenge. The CIPD found that 24% of micro-employers (2–9 employees) have no objectives at all for their benefits package. SMEs are less likely to review their benefits, less likely to benchmark against peers, and less likely to seek external support.

But the flip side is that SMEs don’t need to match what large corporates offer. The CIPD specifically recommends that smaller employers explore low-cost, high-impact options (flexible working being the obvious one) and consider launching new benefits on a trial basis before committing.

Financial education fits neatly into this approach. It doesn’t require large budgets. It doesn’t require a complex benefits infrastructure. What it does require is clear, well-structured content that helps people understand topics like pensions, budgeting, savings and retirement planning. Online learning platforms make this practical even for small teams, with short modules that employees can work through at their own pace.

What employers can do about it

Economic uncertainty was cited by 47% of organisations in the CIPD survey as the biggest factor likely to affect their benefits packages over the coming year. Employment costs (45%) and legislative changes (30%) were close behind. Against that backdrop, the pressure to demonstrate value from benefits spend is only going to intensify.

Some practical steps worth considering:

  • Review what you already offer and check whether employees actually understand it. The CIPD found that only 26% of organisations engage in open communication with employees about their pay and benefits: what’s on offer, why it’s provided, and how to access it. That’s a low bar to clear.
  • Introduce financial education resources covering core topics: pensions, budgeting, savings, debt awareness, retirement planning. These don’t need to be expensive or elaborate, but they do need to be clear and accessible.
  • Set objectives for your benefits package if you haven’t already. Twenty-two per cent of organisations in the CIPD survey have none. Without objectives, you can’t measure impact, and without measuring impact, you can’t justify spend.
  • Review regularly. Benefits that made sense two years ago may not make sense now, particularly given changes to employment law, tax rules and the cost of living.
  • Don’t confuse the provision of benefits with the communication of benefits. The CIPD data consistently shows that organisations which invest in communication and review have higher confidence levels and better outcomes. Offering a pension is one thing. Helping people understand why it matters is another.

The research from both the CIPD and Hymans Robertson points in the same direction: employers who combine financial benefits with genuine financial education build more engaged, more loyal and more productive workforces. The 85% of organisations without a financial wellbeing strategy represent an enormous untapped opportunity - both for those employers and for the people who work for them.

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