Five thought-provoking facts about financial wellbeing

Why financial pressures could be affecting your workforce – and what you can do about it

Five thought-provoking facts about financial wellbeing

Only the very few manage to get through their lives without any money worries at all, and so we all know what impact this can have on our lives. In fact, money worries are right up there with the nature of their work (for example, pressure or working hours), as the top cause of stress in employees’ lives, according to a CIPD report earlier this year.

On the surface of it, money worries are tricky to deal with – but could employers do more to help staff deal with financial anxieties?

Neyber’s DNA of Financial Wellbeing report, which surveyed 10,000 employees, suggests there is.  As an organisation that works with employers to provide salary-backed loans for employees, they clearly have a vested interest in this area, but the research is certainly thought provoking. Here are some facts worth knowing.

1. Money is a growing source of worry

Seven in ten UK workers reported being affected by money worries in February 2016 – that’s an increase of five per cent since the previous year.

2. Why should employers be concerned? How about 17.5 million lost work hours…

Research shows that an individual’s financial worries directly affect the organisation they work for, as they struggle to focus at work and sometimes even take time off because of the resulting high levels of stress and loss of sleep.

Fifty five per cent of employees said that being under financial pressure affects their behavior and ability to perform their job in the workplace. Neyber calculates that this costs UK business 17.5 million lost hours, or £120.7 billion every year, based on an average salary*.

In a nutshell, it affects the health and productivity of employees, creating a significant financial impact on a business.

3. Borrowing and saving are the two sides of the worry coin

The survey found that almost two thirds of employees have borrowed in the last year to meet their basic financial needs – and of these, 37% use credit cards and 8% use payday lenders, which are both expensive ways to borrow and can adversely affect longer term goals.

On the other side of the coin, 34% of employees have less than a month’s savings put by to cover living expenses, in case they cease to earn an income for any reason. While 55 per cent of respondents had a saving goal, just 33 per cent were saving towards it.

At the least. these figures suggest a need for financial education.

4. Younger workers are worse affected

While this is a trend that affects employees of all ages, those under 34 are particularly vulnerable. This is partly because a lack of understanding can influence poor financial decisions and employees have a natural tendency to think short term when it comes to money, rather than planning for long-term goals.

5. Employers have a potential role to play

The survey also found that most workers would welcome financial support from their employer, whether that is access to affordable loans, attractive savings, financial awareness programmes or support and guidance.

And while this was generally true across most age groups, the under-34s were the most receptive.

As employee wellbeing schemes become more widespread, these figures suggest that perhaps they should include financial wellbeing.

For more information, see The DNA of Financial Wellbeing, Neyber, 2016 
*Based on average salary of £27,456 (Office for National Statistics, 2015)

 

 

Sunday 25 June 2017
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