Why the possibility of a no-deal Brexit means a greater demand for financial education
As the Brexit debate rumbles on there are many questions to be answered about exactly what the future holds for our nation and its employees. Although the main debates are around trade, the financial implications for everyday staff are themselves wide-reaching, with the Bank of England (BOE) already stress-testing what could happen with a no-deal Brexit. Consumer pockets could be hard-hit at a time when many are already worrying about their finances and lack of savings.
In September it was revealed that the BOE’s governor Mark Carney had told a cabinet meeting that in the worst-case scenario house prices could fall by more than a third over three years. Despite Carney also indicating that future BOE interest rate rises would be slow and gradual, many homeowners could be concerned about the value of their homes and outstanding mortgages.
Although it is an extreme example of what ‘could’ happen, rather than what will, it’s no surprise that employees may be starting to worry. Whether they are already property owners or are trying to get on the property ladder, it’s possible that such news will be placing extra stresses on staff, especially those who are already worried about their financial health, meaning that providing a financial education package is more important than ever.
Below are three tips for helping your staff cope with the current uncertainty around Brexit and the implications for their finances:
1. Encourage staff to talk
It’s obvious but it’s often overlooked. Just as with mental health, employees are often reticent to talk about their financial health, with the subject coming under similar taboos because staff often feel they should be able to cope. However, encouraging them to open up and share when they are in trouble and not coping financially will help prevent financial health issues escalating into wider physical and mental health problems that could impact both them and your business.
According to Neyber’s The DNA of Financial Wellbeing (2018) report, one in ten of employees say they feel their finances are out of control and 69 per cent of businesses surveyed said money worries impacted their employee’s behaviour at work.
2. Provide education
As well as being encouraged to open up and talk about their problems, staff need to learn how to manage their finances through better planning and access to advice. Whether a no-deal Brexit happens or not, financial education has been proven to relieve employee stress and improve their productivity, with staff more focused on their daily roles rather than worrying about how they are going to pay their mortgage or save for the future.
Employers need to provide financial education that allows their staff to understand where they are at, how to manage possible debts and how to put budget and other savings plans in place. This will help them to feel more in control for the future, as well as understanding how possible future economic changes may impact them. Employees also need to understand how to face possible future market conditions.
3. Offer solutions
From debt consolidation to savings tools, there are numerous solutions that employers can point their staff to so that beyond better understanding their finances, they also have the ability to pick the solutions that are right for them. Such tools can be offered directly as company benefits or employers can partner with specialists to provide the sort of support their staff need externally.
The possible implications of a no-deal Brexit around the housing market have prompted many of those with a tie-in product expiry date to wonder how they can get the best rates now. According to the BOE’s latest Money and Credit figures, the number of approvals for remortgages rose to 53,125 in August. Mortgage approvals also rose to their highest level since January. It’s obvious that even before the warning, employees are already looking to secure their homes.
To support employees during this time, employers can partner with advisors who can help guide staff through the current uncertainty and provide advice on remortgaging and product transfers. They can also help staff to understand whether now is the right time to get on the housing ladder as first-time buyers. These measures will go a long way to alleviating financial stress and better prepare employees for the future.
This article was provided by Charles Cameron and Associates.
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