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19 May 2023
by Jane Hulme

How benefits can support financial – and mental – wellbeing

Financial worries are having a huge impact on mental health. As the cost-of-living crisis continues, what can employers do to help?

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‘Financial wellbeing’ is a broad concept, embracing an individual’s savings, retirement planning and the proportion of income that they spend on non-discretionary (ie fixed) expenses. Keeping on top of finances is a big job, particularly in 2023.

Unum’s research, conducted with Censuswide* in October 2022, found that financial worries about the ongoing cost-of-living crisis were affecting mental health, with 40% of employees saying they have low energy, 32% were unable to sleep and 25% were so worried about their finances they felt depressed.

Clearly, financial worries are having a huge impact on mental wellbeing. And with 18.5 million working days lost to stress, depression and anxiety during 2022, according to the Office for National Statistics, safeguarding employee mental wellbeing is a big issue for businesses, now more than ever.

Mental health disorders can affect anyone at any time in their life. When we feel in control of our finances, we often feel in control of our lives. That’s why financial wellbeing is considered a foundation of overall wellbeing.

In 2020, the CIPD’s Health and Wellbeing at Work Report stated “financial wellbeing is still neglected as a priority area by most employers”. Today, the organisation affirms that employers play a crucial role in helping working people escape poverty and achieve financial wellbeing.

Here are four ways in which employers can help their workforce make the most of their money.

1. Understand employees’ financial concerns

Across your workforce you may have people saving for their first home, preparing for a first baby or planning for retirement. With such a spread of financial concerns, it’s important to adapt policies and procedures to address what’s going on.

A flexible approach to working hours could help parents with young children who might otherwise be facing substantial childcare costs. This could also help those caring for family members, as could an open approach to paid time-off for medical appointments, for example. Encourage employees to share their financial concerns with you, so you can find a way to help.

2. Make sure your benefits packages add up

As well as providing financial benefits via group risk products and company pension schemes, there are plenty of ways that a benefits package can help strained finances.

Health and wellbeing apps such as Unum’s Help@hand can give employees free and rapid access to financial guidance through 24/7 telephone helplines. And employee assistance programmes often include discounts and savings on essentials such as the weekly grocery shop, utility bills and eating out. And remember that it’s important your employees know these resources are available.

3. Provide access to financial education

Research shows that 48% of children believe they don’t receive a meaningful financial education in school, at home or in any other setting. If you’ve never been taught how to set yourself a budget or about the benefits of an ISA, where do you start?

Employers can help by providing staff with access to financial education resources, such as online platforms such as nudge. EAPs can come into play here, too, as many provide help with financial matters such as budgeting, saving, investments, retirement planning and taxes. The Mortgage and Pensions Service also suggests signposting staff to resources that can help with money, such as local credit unions and debt advice services.

4. Discretionary loans and salary advances

Even the best-laid financial plans can be thrown into disarray by an unexpected event.

Employers might consider making interest-free loans available under certain circumstances. These could include help with day-to-day expenses such as food, rent or mortgage repayments, or for extraordinary events, such as health-related expenses or the need to travel at short notice to care for elderly relatives.

Similarly, allowing staff to draw early from their monthly salary or even annual bonus could ease an employee’s financial pain. Ensure that staff know the options available and that they’re crystal clear when it comes to the terms and conditions.

With the current economic situation set to continue, most of us are feeling the financial pinch. Employers who address their workforce’s financial concerns and actively seek to help alleviate them could see a return of better employee engagement, greater productivity and lower absenteeism due to poor mental health. It’s an investment that benefits everyone.

*Research conducted by Censuswide 30th September 2022 – 4th October 2022 among a nationally representative sample of 3,005 employed people

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