This week Close Brothers announced their Financial Wellbeing Index which assesses the financial wellbeing of UK employees across 7 key areas of financial health (budgeting and planning, debt, protection, savings, investments, retirement planning, properties and mortgages and tax).
The index shows rather worryingly that 94% of UK employees are suffering from money worries, with more than 77% of employees saying that money worries impacts them at work. 40% of those surveyed worry about their finances always or often.
The index highlights the urgent need for action. The lowest areas in the index were protection (42.5%), budgeting and planning (48.8%) and tax (48.5).
The fact that budgeting and planning and protection were both low is of no surprise, as they go hand in hand. In fact 34% of people were concerned that they were unprepared for unexpected financial costs or loss of income. The worry over finances also doesn’t seem to be limited to one particular age demographic in the workplace. 87% of millennials and 72% of 25-54 year olds admit that money worries affect them while they are at work.
As the recent studies and surveys show, there is no doubt that poor financial wellbeing is having a significant impact on the workplace. Employers as a whole (89%) understand that their businesses are suffering – and that the concerns are not limited to specific generations but rather across the board. According to the index only 45% of employers are currently providing some workplace financial wellbeing strategies despite the fact that nearly every business is affected by poor financial wellbeing.
Our experience of financial wellbeing in organisations is that it tends to focus more on financial advice, retirement planning (pensions etc) and workplace loans.
Given the scale of the problem and the impact it can have on an organisation (22% reduction in productivity and 13% higher healthcare costs) we believe that more needs to be done to tackle the cycle of spending and low saving. That is why we encourage people to look at our investment hexagon when we deliver financial wellbeing, as the key to changing financial wellbeing is fundamentally changing the psychology of spending.
To find out more about how we can support your organisation to take a proactive approach to wellbeing, including further details on our Financial Wellbeing workshops, then please get in touch.
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