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26 Apr 2023

Why it’s good to talk about money – and how to encourage it

Employee financial wellbeing should be near the top of your benefits list during these difficult times

Why it’s good to talk about money – and how to encourage it.jpg 1

 

As UK inflation hits a 40-year high of 10.4% – further squeezing people’s pockets – encouraging staff to speak up about their money concerns could help ease some of the pressures they face.

Indeed, Standard Life’s Retirement Voice 2022 report reveals that financial pressures are having a significant impact. Of the 6,000 people surveyed, almost half (49%) are cutting back on everyday spending and 58% say they worry about running out of money – despite already cutting back.

Meanwhile, just 41% feel positive about their financial situation – down from 48% in the previous year.

By normalising conversations about money concerns in the workplace and understanding the impact finances can have on mental and physical health, employers could help reduce these stresses and improve financial wellbeing.

Financial worries affecting people’s wellbeing

In March 2023, the Bank of England raised interest rates for the 11th consecutive time. As a result, many employees are likely to face heightened financial pressures on their borrowing costs. This may affect some employees’ mental health.

In fact, more than one-quarter (28%) of people say the rising cost of living has already had a negative effect on their mental health, according to research by asset management firm BMO.

Worryingly, research by the Money and Pensions Service (MPS) reveals that 81% of UK adults avoid talking about money. The most common reasons for this are not wanting to be judged, fear of burdening others and shame or embarrassment.

How talking about money can help

It can feel overwhelming to tackle money problems alone – especially in a climate of soaring energy bills and rocketing food prices.

Starting a conversation about money with friends, families, or colleagues can help to provide emotional relief and moral support.

Indeed, according to the Money and Pensions Service, people who talk about money feel less stressed or anxious and more in control, build their financial confidence and make better and less risky financial decisions.

Employers can play a vital role in encouraging staff to have these conversations, helping to reduce the immediate stresses and improve long-term financial wellbeing. Here are a few ideas to get started.

How to encourage employees to open up

Raise awareness of the importance of talking about money, either through a dedicated employee assistance programme or a trained in-house colleague support network. By making employees aware of the support available and making it easier to access, it helps reduce potential barriers that may be preventing staff from seeking help.

Through internal communications, employers can show that they recognise the importance of this issue to their employees and create safe spaces for people to open up about their concerns.

Create a supportive work environment. For example, it may help to have a quiet room in the office so that employees have a dedicated space to take calls or have down time, if needed. Where possible, it may also be worth considering if staff need to be in the office every working day, to help them save travel costs.

Help employees manage their everyday spending. If people don’t know how to begin managing their money, there’s an increased risk of them avoiding their financial problems – which could make them worse.

You can help by pointing employees towards tools to help them budget. You could also signpost employees towards information on benefits and other support they may be entitled to – some of which employees might not have considered. Online eligibility trackers and calculators may help with this.

They’re not alone

When it comes to financial concerns, it’s essential for people to know they’re not alone. Many others may be in the same boat or have experienced money worries. Creating a workplace culture that cares about mental and financial wellbeing can help manage the pressures many people may face – before they reach boiling point.

To find out how a financial wellbeing strategy can have a positive impact for employers too, read our article ‘How a financial wellbeing strategy can benefit employers’.

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In partnership with 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.

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