Financial stress is linked to poor mental health
There is a direct correlation between financial ill-health and mental health issues, the CIPD has said.
An expert panel, brought together by the CIPD in response to their recent report which found that one in four employees said their performance was affected by financial worries, has called for HR to prioritise financial wellbeing in their workplace policies.
Three in 10 employees said their earnings were just about enough to get by on a monthly basis, whilst Londoners and younger staff were most likely to run out of money. Even those with higher incomes were found to be affected by financial ill-health, with one fifth of those earning between £45,000 and £60,000 said they still had financial concerns.
CIPD chief executive Peter Cheese said: “Even relatively high-paying organisations are surprised when they carry out surveys and find out these issues go quite high up the pay scale.”
On financial wellbeing, Charles Cotton, reward adviser at the CIPD, said: “If you want to be a good employer, this is something you should be looking at.”
How John Lewis supports its staff
Among the other assembled experts who included Makerfield MP Yvonne Fovargue, Jeanette Makings of Close Brothers and Polly Mackenzie, director of the Money and Mental Health Policy Institute, John Lewis director Lesley Ballantyne outlined the financial wellbeing initiatives the retailer already had in place for its staff.
In addition to financial education seminars and specialist support lines, both with significant employee take-up, John Lewis has also spent over £500,000 on loans and gifts for struggling employees in addition to joining a retail credit union.
Insisting there was a strong business case for helping staff with their finances, Ballantyne added there was a missed opportunity around tackling pension provision and staff engagement levels. “For a lot of young people, a pension seems a very distant prospect. I’d like us to shift from talking about pensions to talking about long-term savings.”
Martha How, reward partner at Aon Employee Benefits said: “Many factors contribute to financial challenges: rising property prices and rental rates, high cost credit, expensive childcare and fuel and travel costs. All these things compete with longer term concerns such as savings and retirement and too often, coping with short term challenges means that people simply are not saving enough for the future.
“Despite the endeavours of government and many employers, employees still do not fully understand both managing short term financial priorities and planning for the future. Even where people do understand and are financially savvy, years of low or zero pay rises, years of low interest rates and inflation now beginning to rack up means widespread financial stress and anxiety will almost inevitably be on the rise.”
This article was provided by Aon Employee Benefits.
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