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Employee financial well-being: Behavioural insights

Evidence type: Review i


Experimental research shows that we make many of our decisions by rules of thumb or shortcuts – known as heuristics – that allow the human brain to cope with complex choices with lots of factors to take into consideration. Financial well-being advice should be based on a realistic picture of human psychology – a picture that takes into account heuristics, emotions and other behavioural influences. The report provides insights about using behavioural insights (BI) approaches to influence employee behaviour. It is aimed at organisations already taking action to help support employee financial well-being (FWB). The report was commissioned by the CIPD, the professional body for HR and people development.

The study

The study comprises an overview of key insights from BI literature about how BI can contribute to improve FWB in your workforce. The questions it seeks to answer are:

  • How can BI contribute to improve FWB in the workforce?
  • How might the use of BI insights vary by key employee segments to positively influence their behaviour?
    • People aged 18–25, typically starting their first job or apprenticeship
    • People aged from late 20s to mid-40s, possibly with a young family to support, balancing demands and costs of childcare, rent or mortgage payments and costs of family life
    • Workers in their late 40s onwards preparing for later life who need to maximise their retirement provision while at the same time dealing with caring responsibilities

Key findings

The report gives detailed breakdowns of various behavioural heuristics and how they relate to workplace FWB, within each of the segments. The authors conclude with advice on how to overcome barriers to FWB through ‘BI top ten tips’, summarised as follows:

  • Clarity and simplicity of the message matters – paint a clear and simple picture for employees of the financial benefits of joining a pension scheme
  • Lotteries can be used to incentivise positive behaviour – saving can be made more attractive by adding lotteries that give individuals a chance to win randomly allocated prizes
  • Marketing and presentation matter – financial education programmes should increase their saliency and relevance to their target consumers, taking into account variation in preferences, limited attention and emotional responses
  • Material should be as salient and as relevant to the target audience as possible - material should be provided in the appropriate language and at the appropriate grade level.
  • Generic sources of information do not compare with perceived value of intimate and specialist advice and relationships
  • The most effective programmes use regular follow-ups, to reinforce the lessons. Check in with employees’ progress at pre-agreed periods
  • Programmes should take into account the fact that consumers may not have rational perceptions of their own need for financial education, or how much they stand to benefit
  • Employees could be provided with regular reminders, and tools to track and visualise individual progress, such as how much they have gained to date
  • FWB programmes that are able to advertise tangible, quantifiable benefits to participants may find more willing participants

Points to consider

  • Methodological strengths/weaknesses: o No details are given of the review process and how papers were chosen or excluded.
    • The literature cited comes from reputable sources such as government, bodies such as MaPS, and from peer-reviewed journals.
  • Relevance: A useful summary of behavioural insight biases and their implications
  • Generalisability/ transferability: The report addresses financial wellbeing in the workplace but the insights could also apply to working-age adults in other settings
    • Aimed at employers, but likely also to be of interest to anyone working with improving financial capability more widely such as government, policy makers, support agencies and educators.

Key info

Client group
Year of publication
United Kingdom
Contact information

Kate Spiegelhalter, Annette Cox, Duncan Brown, and Catherine Rickard, Institute for Employment Studies