Money matters: financial wellbeing in the workplace

Money and mental health

Financial wellbeing is about feeling secure, confident and empowered, according to the Money and Pensions Service. It’s about being in control of your finances. An absence of financial wellbeing can have serious and lasting implications for individuals, households, employers and society.

Finances are the biggest single source of concern for most people, with 26% of us worried about money on an ongoing basis, ahead of careers (22%), health (18%) and relationships (14%)¹.

The pandemic and the lockdowns we’ve experienced since March 2020 have exacerbated those financial stresses, with 37% of working people reporting that their household’s level of disposable income had decreased since the start of the pandemic, with those on a low income particularly affected².

But financial worries can affect people whatever their level of income. Research has shown that a third of C-suite executives and three in ten managers have poor financial wellbeing, while employees that earn over £90,000 a year have nearly the same level of financial worries (24%) as those earning between £10,000 and 30,000 a year. Increased salaries can often mean more expensive lifestyles and greater access to credit¹.

Financial stress naturally has an adverse impact on an individual’s mental health and therefore on their ability to do their job and perform well.

“It naturally impacts your working day and your productivity,” says Harriet Shepherd, Workplace Financial Wellbeing Proposition Manager at St. James's Place Wealth Management. Stress can affect your confidence and ability to concentrate. It can also adversely affect how you interact and communicate with other employees.

The cost of poor financial wellbeing

It’s also an issue that’s in the interests of organisations to take seriously. After all, employees are the most valuable asset that organisations have. Around 4.2 million worker days are lost each year due to a lack of financial wellbeing, equating to £626 million in lost output³.

“With wellbeing programmes being at the forefront of organisations’ minds, the financial wellbeing component is an under supported but a massive factor,” says Shepherd. CEBR research found that 7% of employees surveyed were offered face-to-face counselling and advice by specialised staff or external consultants to address specific questions³.

Wellbeing goals

When it comes to looking for support with their financial wellbeing, employers are often the first port of call. However, a report by Aegon found that while 71% of employers believe that their employees would be happier at work if their financial wellbeing were better, many firms remain uncertain as to how best to support employees in this. Just half of the businesses surveyed said they would be able to provide information to staff on debt issues and 38% admitted that they didn’t fully understand the level of financial information they could offer employees⁴.

But a growing number of employers are looking at providing financial wellbeing programmes, according to Shepherd. “The big thing we speak to employers about is their employee wellbeing goals,” says Shepherd. “It’s about choosing a financial wellbeing approach that best suits both their goals and the needs of their employees.”

For instance, in a large organisation it might be about having scalable video-conferencing materials so they can reach a wide audience of employees, while in smaller set-ups it can be easier and more effective to work with people on a one-to-one basis.

Communication is key

“A lot of organisations have good financial rewards, such as bonus schemes and salary sacrifice, but part of wellbeing is translating those packages into real conversations so that employees can understand what it means for them,” Shepherd adds.

It also involves working with partners such as financial advisers to help empower employees to make informed decisions about their finances.

St. James’s Place, for instance, has a network of financial advisers who can provide financial education in the workplace and support people in different circumstances.

“We focus on our face-to-face approach, but we work in many cases with or alongside other wellbeing providers within organisations,” says Shepherd. “The more that different providers collaborate, the more we’re addressing the holistic needs of employees.”

Looking for a trusted adviser to help you with your finances? Talk to a St. James’s Place Partner today.

Find out how St. James’s Place can support your organisation’s financial wellbeing programme.

Join in the National Wellness Conversation.

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¹ The Employer’s Guide to Financial Wellbeing 2020-21 (copies can be requested from salaryfinance.com)
² TUC, The impact of the pandemic on household finances, February 2021
³ Centre for Economics and Business Research, Financial wellbeing and productivity: a study into the financial wellbeing of UK employees and its impact on productivity, 2018 (total sample size: 2,000 UK employees)
⁴ Aegon, Financial wellbeing in the workplace, 2018 (total sample size:500 HR decision makers from a representative sample of British businesses)