The government has announced a plan to turn Britain into a nation of savers by 2030, and at the same time cut the number of households relying on credit cards by launching a financial wellbeing programme. Which prompted us to ask – what is financial wellbeing?
Some of the figures we’ve uncovered are worrying:
- 36% of Britain’s employees have financial worries
- This group are many times more likely than the rest of the population to have sleepless nights, aren’t able to finish daily tasks, and have troubled relationships with work colleagues
- They are more likely to be depressed and are more prone to panic attacks
What does this mean for employers?
- For every 1,000 employees, there are 30 lost days per month due to absenteeism
- There are additional training costs
- There are additional recruitment costs as this group are more likely to be looking for another job
- This gives an impact of between 9% and 13% of the salary cost
The 3 salary bands which show the greatest worries about money are those earning less than £10k, between £10-15k, and those earning over £100k – high income doesn’t mean the end of money worries.
So what causes financial stress? Evidence shows that many people find sticking to a budget in a month to be a challenge and this keeps them in a cycle of short term, expensive debt as 29% of people regularly run out of money before payday.
For those who regularly struggle, their typical financial profile looks something like this:
- The number of days they could live before they have to borrow is 4
- The average amount they save a month is £22
- 70% save nothing each month
- Their average total savings is £246
- 86% have less than £500 in their combined current and savings accounts
What can employers do? Clearly this lack of financial wellbeing of the workforce has an impact on business. There are 6 steps that have been identified as the start of a financial wellbeing action plan:
- Make a robust business case which clearly demonstrates the business impact of financial wellbeing
- Make progress by targeting the help at those who need it most
- Know the needs of your workforce as different help will be needed by different people
- Initiate a change in culture where people are encouraged to talk about their problems
- Build a comprehensive communications plan into the strategy so people can discover easily the help available
- Measure the impact, such as sickness rates, retention rates, job satisfaction surveys, benefits take up, or engagement in financial education.
Clearly this is a complex area – read more about it here.