How employers can help address money worries at work
What does your employer have to do with your financial wellbeing?
It could be argued that they are vitally important when it comes to your financial wellbeing, and indeed your wellbeing overall, as the main provider of your salary and other work-related benefits.
Some new research has identified widespread concerns about money at work, with 94% of those employees surveyed confessing to suffering from money worries.
The research also found that more than three quarters of employees believe these money worries are affecting them at work.
This study comes from Close Brothers who calculated that around 25 million people are affected by money worries at work, with two in five worrying about personal finance issues always or often.
Financial Wellbeing Index
The findings form part of the first Financial Wellbeing Index from Close Brothers.
They looked at the financial wellbeing of UK employees across seven key areas of financial health; budgeting and planning, debt, protection, savings and investments, retirement planning, property and mortgages, and tax.
The average score for UK employees, according to the study, currently stands at 53.6 out of a maximum possible score of 100.
Dragging down this overall score were particularly low scores for protection, budgeting and planning, and tax.
One of the biggest money worries identified, resulting in a low score for the financial wellbeing area of protection, was the fear of unexpectedly losing an income as a result of job loss. This was the third biggest money worry; coping financially in the event of losing a job.
Despite this widespread concern, only 8% of employees have purchased an income protection product, designed to provide a financial safety net in the event of not being able to work due to a sickness or debilitating accident.
Another big concern was the level of confidence in achieving financial goals, with more than half of employees not having any sort of financial plan in place and three quarters not being aware of the tax allowances and reliefs available.
The survey spoke to more than 5,000 employees across more than 1,000 different employers in the UK.
It found that debt issues are perhaps more positive than some other reports have suggested, although paying off debt remains the second biggest money worry for employees.
More than two fifths of employees taking part in the survey said that debt is not an issue for them and 59% of employees are confident in knowing where to get help or advice if they have debt issues.
There are however a significant number of people where debt is a big issue; around one in eight employees said debt is a significant issue.
This issue of poor financial wellbeing at work is a big deal from a business perspective, with almost nine in ten larger businesses affected by poor employee financial wellbeing.
It can lead to lower productivity, loss of talent, higher short-term and long-term absences, a reduction in the number of retirees, and higher healthcare costs.
Taking action to address current levels of employee financial wellbeing, nearly half of larger employers are providing some workplace financial wellbeing strategies.
These strategies include discount vouchers for lifestyle expenditure, financial advice, retirement seminars, employee assistance programmes, and workplace loans.
Jeanette Makings, Head of Financial Education at Close Brothers said:
“Money worries don’t just affect an individual’s financial health; they are one of the single biggest causes of stress, impacting mental and physical health if left unchecked. They are also an issue for businesses with lower productivity, higher absenteeism and higher staff costs which hurts business performance. Doing nothing is no longer an option.
“Employers are perfectly placed to play a significant role in making a difference to the UK’s financial health. Their reward and benefits help fund employees’ lifestyles; employers can reach large numbers of people with communications that are trusted; and employers can procure benefits and financial education, advice and investment solutions to help their employees improve their financial wellbeing.
“Yet despite the growing awareness of the need for workplace financial wellbeing, organisations seem to be struggling to find clarity, transparency, and meaningful measurement on this issue.
“Financial wellbeing is incredibly personal and affects each of us differently; not only because of our financial circumstances but also because of our attitude to both money and stress. For the right outcome, providing education and advice to address all seven areas of financial health and for all employee groups will deliver tangible results for both individuals and businesses alike.”
If you’re concerned about your financial wellbeing, or the financial wellbeing of your employees, do get in touch to find out how our financial planning services can help alleviate these money worries.
The team at Longhurst are financial experts, and meticulous ones at that, however our real passion lies in the human nature side of our work, with your return-on-life and memories being the measure of our success.
All initial meetings are held at our expense, meaning there’s no cost to come and have a coffee/tea with us.