3 ways benefits can help ease employee money worries

Financial wellbeing is not just about money – worry can have a major impact on employee mental health. But there are ways employers can help

The link between financial wellbeing and mental health is strong – and each can have a significant impact on the other.

Employees who worry about their finances are more likely to experience increased stress, disturbed sleep and trouble concentrating. And the longer this continues, the greater the risk that it will develop into a longer-term mental health issue.

This can also affect physical health too. Prolonged stress can affect the immune system, increase the risk of developing type-2 diabetes and cause hormone imbalances.

Poor mental health can mean employees find it harder to deal with money problems and make good financial decisions. For example, those struggling to focus – a common symptom of anxiety – could find it more difficult to understand financial guidance or manage their money.

In fact, research by The Money and Pensions Service found that 74% of people who experience a mental health problem struggle to keep up with bills and payments.

So, poor financial wellbeing increases the risk of poor mental health and vice versa.

Feeling in control

Good financial wellbeing isn’t about how much money people earn. It’s about them feeling in control of their finances, meeting short-term priorities like household bills and having plans for the future – like saving into a pension plan.

Financial wellbeing also covers broader topics, such as financial education and capability. This means that people who feel financially well are more likely to have a good understanding of money and can confidently manage their incomings and outgoings.

Ways to support employees

The employer benefits of financial wellbeing can be just as fruitful as for employees. Indeed, investing in a financial wellbeing strategy can help boost workplace performance and productivity, reduce stress and absenteeism and improve retention and recruitment.

As an employer, there are many ways to help support employees with both financial wellbeing and mental health

1. Provide easy-to-digest financial education

Standard Life’s Retirement Voice 2022 report show there are large gaps in people’s financial confidence and knowledge. Just 59% say they feel confident making financial decisions and only 51% are comfortable in their understanding of financial products.

Meanwhile, 50% say they find the quantity of retirement planning information overwhelming and 41% don’t know what to do with it – suggesting that clear and concise financial content is sorely needed.

Help by providing your employees with bite-size financial education content that’s easy to digest, as well as signposting them to useful external sources like MoneyHelper.

2. Create a supportive work environment

Unfortunately, many people still avoid talking about their money worries. Money and Pensions Service (MPS) research found that 91% of people who are struggling with their mental health avoid talking about money – mainly because of embarrassment, guilt, or shame. Keeping quiet can often make problems worse and harder to deal with in the long run.

As an employer, help by creating a supportive work environment that gives employees a safe space to talk.

A good place to start is to look at your employee assistance programme. Check that it offers support such as counselling or digital wellbeing tools that encourage employees to open up about money concerns,. And make sure that you regularly promote the support on offer through internal communication.

You could also consider setting up a mental health first aider (MHFA) programme. MHFAs provide a non-judgmental listening ear to employees who need help, as well as point them to further support.

3. Direct to debt advice services

The cost of living crisis is pushing people’s finances to its limits. Recent data from the ONS found that one-fifth of adults are borrowing more money as a result of rising costs, compared with a year ago.

Specialist support services can help them tackle debt. For example, MoneyHelper and the MPS are government initiatives that provide free, independent advice. You can also point employees towards the government’s cost of living support hub, which allows them to check if they’re eligible for any financial support to help with rising costs.