5 things organisations can do to support and promote Financial Wellbeing
Financial wellbeing is a critical aspect of overall wellbeing, as financial stress can lead to a range of physical, mental, and social problems, which can negatively impacting employee productivity and retention.
More and more employers are becoming interested in financial wellbeing as a driver of productivity, employee engagement and employer differentiation in the marketplace. Financial wellbeing is more important than ever, and in the current climate, will continue to be at the forefront of your employees’ minds.
Paul Fox, Regional Partnerships Manager at the Money and Pensions Service (MaPS) shares five actions that organisations can take to support their employee’s financial wellbeing, why it’s important to promote and support financial wellbeing, and how the MaPS can help.
What is financial wellbeing?
Financial wellbeing is known by many names – like financial literacy, wellness, confidence or resilience – but put simply, it’s about having a good relationship with your money. For us at MaPS, financial wellbeing is about feeling secure and in control. It’s about making the most of your money from day to day, dealing with the unexpected, and being on track for a healthy financial future. In short: financially resilient, confident and empowered.
There are multiple aspects to financial wellbeing. We break down the UK’s general financial wellness into five key areas:
Receiving a meaningful financial education
Saving regularly
Safe use of credit
Accessing debt advice, and
Planning for and in later life.
And here’s why these aspects of financial wellbeing are so important. Before the pandemic:
11.5 million people had less than £100 in savings to fall back on.
9 million people often borrowed to buy food or pay for bills.
22 million people said they don’t know enough to plan for their retirement.
5.3 million children didn’t get a meaningful financial education.
A financially healthy nation is beneficial for individuals, communities, businesses, and the economy. Financial stress – and its knock-on effects for mental health, relationship breakdown and physical health – can have severe consequences for individuals, organisations and communities.
Why is financial wellbeing as important as physical/mental wellbeing, and what are the consequences of money worries on productivity at work?
Money worries are the biggest cause of stress for employees in the UK.
Anxiety about finances affects physical, mental and social wellbeing, which in turn impacts attendance and performance at work. Low levels of financial capability are a concern across all industries and UK adults believe their financial situation is going to get worse, due to low wage growth and increasing living costs. Money worries have a clear impact on how people feel and behave, both in their day-to-day lives and at work.
So, when your workforce suffers, your business can also suffer. In fact, discretionary effort at work is five times lower for those with low financial wellbeing and for those unhappy with employer’s efforts to help them manage finances. There is also a problem with staff retention, with more and more employees considering moving to a rival company putting financial wellbeing as a priority.
Employers benefit from financial wellbeing. People who enjoy good financial wellbeing are more productive at work. If they are not, employers suffer too.
In 2018, 11% of UK workers reported they had experienced a fall in productivity at some point over the preceding three years as a result of their financial situation. If people don’t fall behind with bills and payments, businesses have healthier profits and cash flow and don’t need to write off debts. People who have financial wellbeing are more likely to spend sustainably, and when people can set aside money for their future, it can be invested in businesses and potentially boost the productive parts of the economy.
Here are five things that organisations can do to support the financial wellbeing of their workforce:
Use good signposting and financial education to help build confidence and resilience.
Help your employees beat the taboo and become comfortable talking about money.
Understand their concerns and needs via polls, surveys and discussion groups, or through third-party data.
Build a network of Financial Wellbeing Champions.
Peer support in the workplace can be immensely powerful. Appoint Financial Wellbeing Champions throughout your business, either standalone or integrated with mental and physical wellbeing, to help signpost colleagues to trusted sources of guidance.
Design your financial wellbeing approach.
Think holistically. Consider how to target and prioritise your activity, based on your workforce needs and available resources. Build a strong case for support to secure buy-in at senior levels of your business.
Target key moments and make support accessible.
Aim to offer guidance when employees are most receptive or in need of support, such when they first join you or are promoted, or at key life stages, like buying a house. Consider whether digital, face to face, on-site, or a blended approach of support is most appropriate.
A quick way to start building financial wellbeing amongst your employees is to include links on your intranet and other communications channels to our guidance and tools. You can also directly embed MoneyHelper resources such as our tools, calculators and videos into your intranet or external website. Let us support you in signposting employees to guidance on:
budgeting and everyday money
access to free, regulated debt advice services using our Debt Advice Locator Tool
planning for later life using our pensions calculator and guidance, and for employees over 50 with a defined contribution pension they can book a free Pension Wise appointment to explore their options for taking their pension money
using credit wisely
saving regularly
Speak to us, we’re here to help. You can find contact details for our UK Partnerships Team, who can provide free and impartial guidance, and support you in developing a financial wellbeing offering on the Money and Pensions Service website at www.moneyandpensionsservice.org.uk
How can we help?
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