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11 May 2022

Top 5 tips for helping improve employees’ mental and financial wellbeing

From preparing for the unexpected to providing someone to talk to about money, there are things employers can do during the cost of living crisis

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Mental health and financial health are inextricably linked. In fact, money worries are the number one cause of poor mental health in the UK. The current rise in the cost of living will hit everyone differently, but all of us are likely to be seeing price inflation hit our lives. And perhaps creating a sense of uncertainty about our financial future.

Employers are in a great position to provide support through their financial wellbeing and benefits channels as the cost of living rises. So, if your employees are starting to feel pressure on their finances and mental health, here’s the five top suggestions from our financial coaches:

1. Help your employees understand what’s going on and be transparent about your ability to help

Be very clear about what’s going on in the areas you, as an employer, are involved with, especially:

• National insurance changes to salary
• How inflation may impact pension pots

You may not be able to help across all aspects of personal finance, but you can do small things to help minimise uncertainty around the changes. We’ve seen employers add messages to payslips or cascade updates through managers to communicate changes.

Where you don’t have a direct impact on your employees’ day-to-day finances, be a bridge to resources – provide calculators, access to budgeting tools, educational webinars to help jargon-bust, as well as coaching support or someone to talk to.

2. Help them prepare for the unexpected

None of us can know what the future will bring, which understandably creates added stress. But there are steps we can all take to feel more prepared for whatever comes our way.

One of the first things our coaches suggest to improve financial health and resilience is building up an emergency fund (or a ‘rainy day pot’). It can take time to build, but it’s one of the most powerful things you can do to feel in control of your money.

As difficult as it may feel, we all need to look forward and start preparing for additional price rises later in the year. In October, the energy price cap is set to increase again, potentially another 30% and this is just as we all turn our heating back on for the colder months. So communicating with your employees regularly and consistently through the summer will be important to help them to prepare financially.

3. Help them think ahead

The present focus may be on cost of living increases for the rest of 2022, but we know from our research that employees who don’t feel confident about their financial future are more likely to be worried about money.

One of the secrets to feeling in control of money is to plan. As human beings, we’re wired to focus on the present and what’s right in front of us. But the right financial balance is based on having enough to spend now on things you love doing, but also thinking about future goals all the way up to retirement.

Because retirement is a long-term goal for many of us, investing in a workplace pension can be a great option. It’s also one of the best ways to try and retain the value of your money during inflation. For some people, even increasing their pension contributions by just 1%, could make a significant difference to your future finances.

4. Keep the conversations open and visible

There’s still so much taboo around money. In fact, nine in 10 of us don’t find it easy to talk about money (according to MAPS 2021). But it’s been proven that talking to someone about money (whether a partner or a friend or a financial coach) helps us to manage it better.

We know from our research that employees who do not have someone knowledgeable to talk to are nearly 20% more likely to feel stressed about their personal finances.

As an employer, giving a name to financial wellbeing can help to normalise it and allow it to be talked about. If employers consistently put the topic on the table alongside other big topics like physical health and mental health, it shows your employees that you view it as a priority.

5. Give your employees someone to talk to

We know from our research that 89% of employees want help with their finances. Almost 60% want this to be in a coaching style: supportive and validating. Employees who feel clear about their personal financial goals are eight times more likely to feel positive about their future.

Financial coaching is a great option here, because it’s 1:1 and truly bespoke to an employee’s individual financial situation and goals. But, equally, we’ve seen informal networks, Financial Wellbeing Ambassadors or internal communications channels used effectively within workplaces to make sure employees have somewhere, or someone, to turn to with money questions.

Everyone is different and there’s no one-size-fits-all solution, but starting to talk about money will help break down barriers and reduce the stigma and stress which impacts mental health.

Download ‘Rethinking Financial Wellbeing’ a survey of 1000+ FTSE50 employees about what they want when it comes to financial wellbeing.

In partnership with Octopus Moneycoach

Giving every employee their own financial coach and a personal financial plan

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