- Financial wellbeing
- 4 minute read
If you’re striving to be more proactive with financial wellbeing in the workplace, you’ll want to know what financial factors are impacting the health and wellbeing of your employees.
In many ways, our lives revolve around money. And while it can’t buy happiness, it can certainly help buy peace of mind. Money (or issues relating to it) can also have a huge impact on employee wellbeing. This is something employers are waking up to, with more and more businesses choosing to focus on financial wellbeing initiatives for their employees.
The situation is bad and doesn’t appear to be getting any better. More than half of UK adults are worried about the impact money worries have on their mental health. More than 18 million worry about money on a daily basis, with a third saying their sleep is being affected.
Common signs of poor mental health in this area include changes in mood and temperament, heightened anxiety, a lack of sleep, changes to appetite and an unwillingness to discuss financial problems or even contact the bank -- for some, money worries are so overwhelming, they would rather avoid the problem altogether. Lack of sleep is particularly concerning, according to neuroscientist Doctor Jack Lewis, who says:
“Worrying too much can negatively impact our ability to get a good night’s sleep, which is vitally important because sleep gives our brains the opportunity to do a variety of essential tasks, from consolidating memories to removing toxic metabolic waste. [...] Constantly worrying about finances means having chronically elevated cortisol levels, which gradually wears us down.”
Below are four financial areas affecting the health and wellbeing of your employees. Becoming aware of these common sources of stress and anxiety can help you put measures in place to help your workforce.
1. Concerns over unmanageable debt
For many people, debt is just a part of life, and one they struggle with every day. The average UK household debt now stands at £15,385, with the average Brit having £2,688 unpaid on credit cards. In fact, the Independent suggests our relationship with debt is as high as it was before the financial crisis hit.
Indeed, debt is such a big part of our lives that a third of us don’t believe we’ll ever be debt-free. Clearly, employees need help to put their debt in perspective. You can work with them to create a budget and a plan to pay off debt. Once employees know they have someone in their corner and they have a solid plan in place, their situation will begin to feel much more manageable.
2. Worries about financial health in retirement
Employees want to know they will have enough money to make ends meet when they’re no longer working. Retirement is a worry for many employees, with 31% saying that funding retirement is their biggest financial worry. It appears that women are particularly concerned, with nearly half of women surveyed saying they feel unprepared for retirement, when compared with only a quarter of the men surveyed.
Over the years, minimum auto-enrolment pension contributions have risen in the UK from 2% to 8% in April 2019. Employers and employees can increase their contribution rates further to build a more comfortable retirement. This is something you need to discuss with your employees today.
3. A lack of financial protection; having to live month-to-month with no financial safety net
Financial protection is important for everyone, regardless of income. Some of us are living month-to-month and one-third of Brits have one month’s salary or less saved up in case of emergency. Some of us have no savings at all.
However, financial protection is a concern for everyone, regardless of income. We can all face issues such as accidents or serious illnesses. A lot of people worry about what might happen to their loved ones if the worst should happen. What would the financial effects and fallout be?
Companies have a responsibility to assist employees and make them aware of financial planning protection. Financial protection includes cover such as life insurance, income protection insurance and critical illness cover. Having these measures in place can have a huge impact on wellbeing, affording employees peace of mind.
4. The inability to get on the property ladder
The cost of keeping a roof over our heads can be one of our biggest expenses, and one of the biggest financial factors affecting health and wellbeing. This is particularly true when you consider that, for most employees, getting on the property ladder is a pipe dream.
More than 5.5 million Brits believe they’ll never own a home, with one-third of single Brits thinking they need to ‘couple up’ to buy a property. This is another area where setting a budget and having a long-term plan can seriously help employees. Some may simply need a few tips, pointers and financial advice from their employers so they can feel confident about fulfilling a significant financial goal.
If you are looking to improve levels of financial wellbeing at your organisation, contact Close Brothers today to begin a discussion of how we can help your organisation and your employees.