How to help your employees manage their money worries
Poor mental health can make it harder to manage money.
The good news is that there are lots of ways employers can support their employees and help them break this cycle.
The cost of living continues to impact many people, with almost half the nation (45%) saying it’s affected their mental health, according to our Retirement Voice 2024 report.
Indeed, the link between financial wellbeing and mental health is well documented.
According to the Money and Mental Health Policy Institute, nearly half (46%) of adults in debt also experience mental health issues.
On the flipside, poor mental health can make it more challenging for employees to deal with money problems and make good financial decisions.
For instance, employees who are struggling to concentrate as a result of anxiety could find it harder to understand financial guidance or manage their money.
In fact, the same Money and Mental Health research reveals that people experiencing mental health problems are 3.5x more likely to be in problem debt than people without mental health problems (5%).
This creates a vicious cycle; poor financial wellbeing increases the risk of poor mental health, and vice versa.
Why is financial wellbeing important?
Financial wellbeing isn’t about wealth; it’s about health.
It’s about feeling in control, meeting short-term priorities like household bills, and planning for the future – like saving into a pension plan.
People who feel financially well are more likely to have a good understanding of money, can withstand financial shocks, and can confidently manage their incomings and outgoings.
When people are worried about money, this doesn’t stop at the office door. The ongoing stress can manifest itself in the workplace too.
According to research by the CIPD, 28% of employees said money worries have affected their work performance, including their ability to concentrate and make decisions, while 29% say cost of living-related concerns have negatively impacted their productivity.
Four tips to support employees with their financial wellbeing:
Good financial wellbeing can benefit employers just as much as 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 you can help support your employees with their financial wellbeing – and help reduce their money worries as a result.
Here are a few suggestions to get started:
1. Help employees boost their financial knowledge
A good place to start is to provide employees with targeted financial education that can help improve their financial knowledge and confidence.
Better still, sharing resources that address employees’ specific needs, and in a way that’s relevant to them, can help to encourage maximum engagement.
For instance, for employees who are buying a house, you could signpost them to resources like MoneyHelper, which covers relevant topics like saving for a deposit or applying for a mortgage.
If you’re with Standard Life for your workplace pension scheme, employees can use its Homebuyer Hub, a digital tool that guides first-time buyers throughout their entire homebuying journey.
Standard Life members can also access webinars covering a range of topics to help power-up employees’ financial knowledge, including tips on creating a savings plan and how they can make the most of their pension.
2. Point to relevant planning tools
Key life events or changes like buying a house, caring responsibilities, and retirement can have a big impact on an employee’s finances.
To help employees feel better prepared, consider pointing them to planning tools that can help improve their confidence in making financial decisions, whatever life stage they’re at.
Budgeting tools could provide a good starting point.
MoneyHelper offers a budget planner that can help employees record their spending and break them down into categories.
Standard Life workplace pension scheme members can also use its Money Mindset platform, provided in partnership with Moneyhub Financial Technology Ltd, to better understand their spending habits.
It uses open finance technology to give them a real-time view of their money – including bank accounts, mortgages, and pensions – making it easier to budget and make well-informed decisions.
For employees who are starting to think about their later-life income, retirement planning tools can help them understand their options.
You could signpost to the Money and Pensions Service or to any internal resources you might have.
Standard Life’s Retirement Income Tool can also help its scheme members get an idea of how much they might need to fund their ideal retirement lifestyle.
Employees who are approaching retirement may be considering the different ways to take their pension savings, such as buying an annuity, taking drawdown, or a combination.
Standard Life's Mixed Income Builder tool can help them understand how they could combine the options, helping them get the balance right between flexibility and security.
3. Normalise conversations about money
Research by the Money and Pensions Service found that 91% of people who are struggling with their mental health avoid talking about money.
But by keeping quiet, this can often make problems much worse and harder to deal with in the long run.
As an employer, you can help by creating a supportive work environment that normalises conversations about money.
You could start by checking if your employee assistance programme (EAP) offers support that could encourage employees to open up about their money concerns, such as counselling or digital wellbeing tools.
Remember to promote the support on offer through your internal communication channels too.
This can act as a valuable reminder to anyone who finds themselves in a moment of financial worry.
Standard Life workplace pension scheme members can also access a range of ready-made communication materials to support your wider financial wellbeing programme.
4. Signpost to debt advice services
Our Retirement Voice 2024 report reveals that two-thirds of people are worried about meeting their energy bills (69%) and coping with rising costs (66%).
If any of your employees are worried about making ends meet or struggling with debt, you can help by signposting them to specialist support services.
For instance, MoneyHelper and The Money and Pensions Service are government initiatives that provide free, independent advice on a range of financial topics and issues.
If they’re able to, setting aside money for unexpected expenses could give employees some added reassurance.
More insights on financial wellbeingare available on Standard Life’s Financial Wellbeing hub.
Supplied by REBA Associate Member, Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.
