10 Surprising Financial Wellbeing Facts Every Employer Should Know

 

So you think you’ve got your mental health strategy all worked out, and you offer a pretty sweet gym discount and private healthcare product to cover your employee’s physical bodies. Still, if you are ignoring their financial wellbeing, you can almost guarantee that their overall health and wellness is not going to be anywhere near as good as it should be. 

With recent advances in technology – namely Open Banking, and the current pandemic situation highlighting the money-related pressures individuals are facing, the spotlight on financial wellbeing has never shone brighter. 

We know that Financial Wellbeing should be at the core of any wellbeing strategy; here are some of the critical reasons why:

1. Money is the number one cause of stress in the UK

You are 5.3x more likely to be suffering from depression and 3.7x to have anxiety problems if you have poor financial wellbeing. Worryingly, 94% of UK employees worry about their money. SO there’s a high chance your employees are struggling with some money-related stress.

2. It costs business a lot of money

And it’s all down to lost productivity caused by presenteeism, absenteeism and low staff retention. Staff members bogged down by their financial woes often spend time thinking about their money, rather than concentrating on their job. In fact, 35% of workers believe that their financial concerns prevent them from performing their best whilst at work. The cost of lost productivity is enormous: 17% of your yearly payroll, equating to 70bn a year for UK business.

3. A quarter of UK adults have no savings

Zero, zilch, nada Nothing to fall back on, nothing saved for a rainy day and no investments to speak of. When it comes to alleviating money stress, having an emergency fund certainly helps. Often, a lack of saving isn’t just down to having a lack of money; it frequently comes down to not knowing how to set, and stick to, a budget.

4. Nearly half of UK adults don’t feel confident in making financial decisions

Particularly when it comes to choosing financial products and services which are longer-term. Also, 59% of people of working-age didn’t seek financial advice when it came to big life events like buying a house or organising a pension.

5. 55% don’t feel they understand pensions

When it comes to making important decisions about their pension, UK workers say that they don’t have enough knowledge to make a sound decision for their savings for their retirement. 

6. Poor Financial wellbeing affects all income brackets

From the intern to C-suite, no employee is free from the risks associated with poor financial wellbeing. Research has found that people earning between £10k and £30k per annum have a similar level of financial worries as those earning £90k+ per annum (27% vs 24% respectively). It doesn’t vary much between how much they earn, what industry they work in or where they live – poor financial wellbeing doesn’t come down to your level of seniority or your income.

7. Your employees want your help

There can be a tendency to think that employers should stay out of their employees personal finances; aside from paying their wages, there’s nothing else you can do to help – this is wrong! Research has found that 50% of employees want their employer to provide financial guidance tools.

8. Higher financial literacy = higher financial wellbeing

People who have increased their financial literacy and learnt how to manage their wealth in a constructive way found that their financial wellbeing improved, often feeling less stressed by and more able to cope with their money.

9. 40% are living paycheck to paycheck

A significant number of people are barely scraping by to the end of the month. Many (78%) are having to rely on expensive payday loans, advances and credit cards to see them through. In London, 91% rely on debt to see them through. 

10. Fewer than 1 in 5 workplaces offer financial wellbeing support

This means there are millions of people across the UK who, despite desperately needing financial wellbeing guidance, are not receiving any help.

 

As you can see, despite all the signs and statistics pointing to the massive importance of financial wellbeing on both individuals and their employers, many are still neglecting their employees by not providing adequate and innovative financial wellbeing support. Considering the impact poor financial wellbeing has on business, it’s not something that should be ignored any longer.

Services like Bippit which provide expert, personalised, confidential and impartial financial wellbeing tools at the touch of a button are revolutionising how your employees manage their money and grow their long-term wealth. We are here to support your teams on their path to financial freedom – get in contact today to hear more about how we can help.

The Psychology of Financial Wellbeing

How to increase happiness in your company

According to the Office of National Statistics, there has been a dramatic downward shift in the average rating of life satisfaction, anxiety and happiness in the UK. 2020 marks the first year where the numbers have worsened from the previous years findings. They found that anxiety levels rose by 6.3% (which is the highest level recorded), and happiness levels fell by 1.1%.  

People are understandably feeling more stressed, and managing finances has been at the foreground of most people’s minds, especially the closer we get to Brexit and the longer we face local Covid-19 lockdowns. The mental load of financial worries can be heavy; triggering a range of issues not just mentally, but physically too. Plus, the knock on effect of poor financial wellbeing in your employees to your business can be harsh. A recent study by Barclays found that one in ten employees are silently struggling financially. 

When it comes to the effects of poor financial wellbeing, your employees are likely to be experiencing a range of emotions:

Shame

Not to be confused with guilt, shame comes when you feel like you’ve let yourself down. This is common amongst people who are struggling with their finances because they feel personally responsible for not earning enough money, or because they are not ‘good with money’ and have a tough time budgeting. They feel embarrassment tied to their lack of financial prowess, and this in turn can lead to them making unwise decisions when it comes to money, or to them not seeking appropriate help at the right time.

Fear

Some people feel “scared” of dealing with their money. They don’t want to face the reality of their money, so instead they practice avoidance. They will continue to do what they’ve always done, for fear of having to confront a reality that is difficult to fix. This can lead to spiraling debts, lack of savings or a general lack of financial security. Fear stops them from making progress.

Envy

A classic case of keeping up with the Joneses can make your employees adopt spending habits that are not suitable for their actual lifestyle, but for the one they would rather be living. Envy adds more stress because they’ll never actually achieve true happiness by acquiring more things, and are more likely to get more debt.

It’s said that to achieve long-term happiness, you need to have a high level of financial wellbeing. This looks like:

Being on track to meet all your financial goals, having financial freedom, being able to withstand shock costs and to be able to cover your monthly spending comfortably. 

All of which are achievable, for everyone, as long as they have the know-how and support from the appropriate sources.

Aon has found that ‘71% of employers believe they have a responsibility to influence employee health and change behaviour” and that “62% of respondents also saw employee financial wellbeing as their responsibility” which shows that businesses are aware of their impact on their employees financial wellbeing, and resulting overall life happiness. It’s hugely reassuring that companies want to break the cycle of negative emotions and behaviours. Employees are responding well to company benefits that support their financial wellbeing, especially if it’s done in an authentic and sincere way where your employees get real value, and it doesn’t come across as for the sole benefit of the company.

Some ways you can help your employees:

• Communicate and encourage your employees to use the financial wellbeing solutions that they have access to as part of their company benefits package. Make sure everyone knows how to access and use their company benefits. Also consider making it clear how they will help them. Here at Bippit we offer our partners webinars, guides and other employee training/comms that gets their employees engaged with the platform.
• Encourage open discussions about money, debts, investments and budgeting. Make your workplace culture a safe-space for talking about money. It’ll help your employees to reduce the stigma they may feel about talking about money. At Bippit, we offer Financial Wellbeing Lunch & Learns, which is a great first step to help your employees learn how to improve their financial health and start talking about money.

We all want our employees to feel motivated, secure and confident in managing their money, so that they can dedicate their time at work to productive output, and not to worrying about money. It’s on us to ensure the environment they work in, even at a distance, is collaborative, open and supportive. We’ve created a handy guide to Financial Wellbeing which is packed with more practical information about how you can support your employees. To find out more please get in touch – we are here to help!

Are you failing your female employees?

 

 

Why female financial wellness is vital to business success…

Currently, for every £100 that a man earns, women make £82.70. 

There have been many positive initiatives to try and close this gap, but more women are still suffering from lower financial wellbeing than men. There’s a massive gender disparity which finds that on every index, women score lower than men when it comes to their financial wellbeing. On average women have a financial wellbeing score of 48.1 vs men’s 58.3. 

We think this is a big issue and one that needs addressing in the workplace if businesses are going to increase growth and profits. 

So what are the problems impacting your female employees, and how can you ensure they are adequately supported so that they can reduce financial stress? It might surprise you, but the answer isn’t just to pay them more! 

 

Savings

When it comes to savings, women are lagging behind. Since 2017 there has been a 15% fall in the average amount of savings women have, in contrast to their male counterparts 8% rise to an average of £39k. 

When it comes to women with no savings whatsoever, the numbers are similarly alarming. Over the past three years, fewer women managed to build any savings, whilst more men have managed to save. 14% of women have no savings, in comparison to just 7% of men. 

34% of women run out of money each month, compared to just 22% of men.   

The impact of having little to no savings can be huge. Despite men having more credit card debt (on average), one study found that 26% of women are not able to pay off their credit card bill at the end of the month. Only 14% of men said the same. This reliance on debt to plug the income disparity is leaving some women in dire straits. Facing mounting interest costs and missed deadline penalties, means that many get trapped in a cycle of debt, and without savings, struggle to get out of it.

 

Money Worries 

Debt Charity Step Change has revealed that there are 4.5 million women who say they’re losing sleep due to their financial worries; more than 1.5 million more than men. Women are mainly worried about their ability to afford essential household goods, not having enough savings, and being in debt. Women are also feeling under intense pressure caused by their lack of preparedness for a financial emergency, with 33% giving this reason as the cause of stress. 

Women are five times more likely to have anxiety issues, and 6.7 times more likely to have depression than men which they say is caused by money worries.

For your business, any of your employees suffering from poor mental health – impacted by poor financial wellbeing – is too costly to ignore. 

Poor financial wellbeing costs UK businesses £29 Billion per year.

 

Confidence

Your female employees are likely to be less confident when it comes to money and finance than their male equivalents. They are less likely to take risks with their money or make risky investments. Typically, women end up with far less in their retirement fund than their male counterparts due to a mix of being over-cautious, having family commitments that lead to work gaps or reduced working hours, and a chronic lack of pay parity. 

This is a problem for your business because there will be a portion of employees that are unsure how to improve their financial situation – which ultimately costs you money.

Currently, 72% of women “would find general information highlighting steps to improve their financial wellbeing useful”, but only 12% have access to financial education resources from their employer. Businesses have a duty of care to make sure their employees have access to financial wellbeing products that enable them to work towards freedom and security.

Ultimately, employees want it, and they need it.

 

The financial wellbeing of your female employees boils down to 3 simple things:

1. They need access to the best care and resources to teach them how to manage, track, and take care of their money in a way that’s right for their situation.

2. They need to have support from their employer when it comes to career and pay progression.

3. They want to work in an environment that supports them to be more open about their finances and to discuss how they can build a more robust and wealthier future.

 

We can help get your employees get personalised financial wellbeing support through our innovative, tried and tested platform. 

Get in touch to find out how we can support your staff today.

Out of sight, out of mind?

 

 

Why your work from home employees desperately need Financial wellbeing support.  

When we were all plunged into a national lockdown in an effort to curb Covid-19, none of us could have guessed that more than six months later we’d be facing tighter restrictions on getting back to any sort of normality – particularly when it comes to working. A few weeks ago, the government was encouraging us to get back into the office to help “save the economy” and get the country moving again. Except, now many businesses are either back into local lockdowns, or have staff who are understandably reluctant to start their daily commute again. 

For most HR managers, working from home has thrown a whole bunch of unexpected challenges your way. Not only are you adapting to not having your employees physically in one place, but you also need to manage their working environment, benefits, and company culture from afar. It’s a tough job to do, but now more than ever it’s crucial you pay attention to the financial wellbeing of your employees, even if they’re continuing to work from home. 

Put yourself in your employee’s shoes. All the familiarities of “going to work” have been stripped away – networking opportunities, team socials, chances to impress your boss in-person 🙂 – all gone. Because of the uncertainties of work – possible redundancies, furloughed workers, and businesses failing altogether, people are increasingly stressed about their finances – around 40% in fact, and 42% are worried about losing their job. 

They may also have seen a fall in their household income if their partner has been furloughed or ultimately lost their job, so your staff will be trying to manage their money in a completely different way. We know that 94% of employees say they worry about money, and three quarters admit it impacts their work. 

Not only is this costing your business money (lost productivity costs businesses around £70bn per year), but 88% of employees want you, their employer, to give them access to top-quality financial guidance. This raises the question of how you can support your employees to get financially fit, even if they’re working from home. 

With that in mind, here are a few things to consider:

 

1. Get Talking

Working from home may have started as a bit of a novelty, but the shine has worn off for some. One of the biggest things employees are concerned about at the moment is their work-life balance. Some have even described it as ‘living at work’, feeling like they have little time available for anything other than work, including managing their money. Now’s the time for you to make sure your employees are clear about all their workplace benefits, including access to financial support and how they can access them from home. Promoting workshops and webinars that focus on providing useful financial wellbeing tips and strategies will not only offer real help to your employees; it will bring your teams together in a more social way.

2. Promote Team Wellbeing

Physically being together might not be a possibility, but this shouldn’t stop your employees from being able to enjoy some networking, team ‘downtimes’ or accessing wellbeing support. You can make the most of digital comms to ensure that people stay connected, use all available channels like apps, emails, and video calls to get ‘face-to-face’ help making them feel connected to your company in a real way. It’s also a good way for you to keep an eye on how your employees are coping while working from home. Distance working can be lonely, and some people might need more focus on their wellbeing during this time.

 

3. Reassure Your Employees

A lot of worries are being exacerbated by uncertainty in what the future holds for work and money. Recent research has found that 61% of employees say that they have little faith in the economy improving in the near future. Making sure that staff feel reassured and helping them understand what is going on behind the scenes to keep their jobs secure is incredibly important. Shout loud about any big company wins and be sure to communicate any changes to reduce the anxiety of your staff.

 

4. Address Their Concerns

If you can’t get out and mingle with colleagues or even work from a cafe anymore, chances are your employees will experience some isolation. Open a channel where people can contact support in a comfortable, confidential manner. This is going to help your business when it comes to absenteeism as you’ll be able to offer 1:1 support exactly where it’s needed. You can provide direct support when it comes to financial issues by pointing your employees in the direction of the financial wellbeing services that are included in their employee benefits. It also helps employees to build trust and loyalty towards their employer, which is excellent for boosting job satisfaction. 

 

5. Get Feedback and Suggestions on the Future of Work

Have open and honest feedback sessions where your employees can suggest specific changes they’d like to see for their future at work. Perhaps working from home has made them realise that they’d like to be more flexible with work (freeing up office space), or maybe they’d like to return to the office as soon as it’s relatively safe to do so. We already know that 28% of employees want to work from home more often in the future, and around the same amount would like more support with their mental health, to do so effectively. Remember, good financial wellbeing is crucial to have excellent mental health, so as their employer, it’s essential to make sure your employees have all the right tools and benefits to support their work-from-home career. 

Bippit is an advanced financial wellbeing platform that allows all your employees to receive personalised financial guidance from a real, human, financial expert. Bippit is jam-packed with useful resources in our Library where your employees can get clued up on all things money. If they have any questions, they can ask their financial coach at any time, from anywhere. They can also create and manage their budget, along with setting some money goals that will help them to become more financially secure. 

If you’d like to find out how your business can support your employee’s financial wellbeing journey with Bippit, please get in touch today.