- 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. As a result, 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.
A large proportion of UK adults are worried about the impact that money worries have on their mental health, and for some daily financial anxiety may start to affect their physical health. 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 common financial areas which may be 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.
Related: The top 4 benefits of financial wellbeing at work
1. Concerns over unmanageable debt
For many people, debt is just a part of life, and one they live with every day. Many UK households may hold debt in the form of unpaid credit cards or payday loans.
Indeed, debt is such a big part of our lives that a third of us don’t believe we’ll ever be debt-free. To combat this source of stress, your employees may benefit from strategies which help to put their debt in perspective. You could approach them with the option to 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 hopefully begin to feel more manageable.
2. Worries about financial health in retirement
Many employees have concerns about whether they will have enough money to make ends meet when they are no longer working. Retirement can be a worry for many employees, with 31% saying that funding retirement is their biggest financial worry. Research has shown that women can be particularly concerned about this with many feeling less prepared for retirement, than their male counterparts.
Over the years, increases in minimum auto-enrolment pension contributions have helped UK employees to build toward a more comfortable retirement. Increased contribution rates may be something you can discuss with your employees, to help them feel more prepared for retirement.
3. A lack of financial protection
Financial protection is important for everyone, regardless of income. Some workers live month-to-month and research from 2018 found that one-third of Brits have one month’s salary or less saved up in case of emergency. Some of your employees may not have any savings at all.
However, financial protection is an important tool for anybody who faces worries about the financial implications of accidents, serious illness or death. A lot of people are understandably concerned about the financial effects of these potential events and how the fallout would impact their loved ones.
As an employer you have a responsibility to make your workforce aware of financial planning protection, and how it can include cover such as life insurance, income protection insurance and critical illness cover. Knowing more about these options can have a huge impact on your teams' wellbeing, affording them peace of mind.
Related: Practical ways to improve financial wellbeing for employees
4. Getting on the property ladder
The cost of keeping a roof over their head can be one of your employees' largest expenses, and is therefore one of the biggest financial factors which may affect their health and wellbeing. This is particularly true when you consider that, for many employees, getting on the property ladder is a pipe dream.
Understandably then, many Brits believe they’ll never own a home, with many single people assuming that the conjoined financial power of being in a relationship may be the only way to buy a property. Buying property is another area of financial stress where setting a budget and having a long-term plan can meaningfully help your employees. Some may not need a full financial plan, and instead they may simply need a few tips and pointers from their employers, so they can feel confident about fulfilling this significant financial goal.
If you are looking to improve levels of financial wellbeing at your organisation, contact us to discussion of how we can help your employees.