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Misconceptions of Financial Wellbeing

7th April, 2020

Hannah-Rebecca Findlay



As coronavirus forces business to adapt and change the way that they operate, companies are trying to protect their workforce whilst also keeping a sharp eye on their bottom line.

Financial pressures are now squarely in the spotlight with people losing their jobs, seeing a reduction in hours or being furloughed. How finances are managed during difficult this period may have wide ranging effects on daily life going forward.

Being part of a distributed workforce has also become the new reality for many. So, now is the perfect opportunity for organisations to create value for their employees, by enabling them to take control of their own learning and in turn wellbeing.

Learning programmes which are geared toward employees’ current stress points, such as financial wellbeing, can provide key support. This gives a connection to your business from both a professional and personal view.

So, what is financial wellbeing?

“Financial wellbeing is about a sense of security and feeling as though you have enough money to meet your needs. It’s about being in control of your day-to-day finances and having the financial freedom to make choices that allow you to enjoy life” - CABA, 2019.

Within the workplace, financial wellbeing is about creating a positive culture about how employees engage with and manage their money.

Having a workplace financial wellbeing strategy in place communicates a commitment to your workforce that you value their wellbeing, want to assist them in feeling empowered to take control of their finances and, more importantly, want them to thrive in and out of the workplace.

Many organisations are struggling to implement strategies and initiatives that are driving impact, creating sustainable culture change and yielding a return on investment in the context of increased productivity and improved business bottom-line.

Below are some of the common misconceptions we are seeing with some of the approaches, and why employers need to address these within their strategy in order to drive impact:

Financial wellbeing and financial education are the same

Actually, financial wellbeing and financial education are not the same thing. The difference between the two is simple; one tackles the heart whilst the other the head.

Financial Education tackles the root cause of poor financial wellbeing. It is the application of the knowledge and skills to one’s finances in order to allow proper management and planning of one’s finances (i.e. Understanding how to budget and save, or understanding the different tax exemptions and allowances and how they relate to particular circumstances).

Financial Wellbeing on the other hand, looks at how your finances make you feel when looking at habits and behaviours; it’s about being in control of day-to-day finances and having the financial freedom to make the choices that allow you to enjoy life.

A good strategy recognises that whilst financial education is important to ensure employees are equipped with the tools they need to successfully navigate their finances, the behaviours and feelings behind financial decisions must also be addressed to drive impact.

It’s an employee problem which doesn’t impact my business

Historically, employers have underestimated the impact that an employee’s poor wellbeing can have on their bottom-line. The disparity between assumption and reality is stark. This is outlined in the Close Brothers Financial Wellbeing Index 2019 where 30% of employers thought money worries impacted their employee’s performance. In fact, three quarters (73%) of employees stated that financial worries impacted their performance in the workplace.

The increasing number of statistics showing the real consequence of financial worries in the workplace, specifically on productivity, engagement, absenteeism, retention and most importantly, bottom-line reinforce why organisations cannot afford to dismiss them.

Some of these alarming statistics state that employees with financial concerns are:

    • 14.6x more likely to have sleepless nights

    • 12.4x more likely not to finish daily tasks

    • 7.7x more likely to have troubled relationships with work colleagues

    • 1.5x more likely to be looking for a new job

In fact, 9-13% of a company’s annual payroll is impacted each year in productivity, additional recruitment and training costs amongst other areas. This means the problem also becomes a business risk rather than just a HR nice to have.

Employers that have a mental wellbeing strategy don’t need a financial wellbeing strategy

In England alone over 1.5 million people are experiencing both problem debt and mental health problems. It’s a vicious cycle where worrying about money can detrimentally affect mental health and poor mental health can make managing money harder.

Given the close connection between financial worries and mental health, it’s near impossible to address one area and not the other. The following statistics outline why a mental wellbeing strategy which ignores financial pressures is unlikely to have the impact your organisation wants.

    • Employees with financial worries are 4.1x more likely to be suffering from panic attacks and anxiety and 4.6x more likely to be suffering from depression

    • Employees with money worries are 50% more likely to report signs of poor mental health that affect performance at work

    • Half (46%) of people in problem debt also have a mental health problem

For organisations to break the cycle created by the two, it is important they provide support for both money and mental health in tandem.

Financial wellbeing is only about earnings

It is very easy to assume that financial worries only affect low income earners. However, the reality is, financial worries and pressures can impact anyone regardless of how much they earn or have in their bank account.

It’s not the amount you get paid, but what you do with it that determines your financial wellbeing.  

One in four high earners report the biggest barrier to managing their finances is finding the time. And they are not immune to making poor financial decisions and getting into debt.

In order to retain, engage and drive productivity from your staff you need to ensure your benefits package and employee value proposition is not only relevant/personalised to your workforce needs and priorities, but genuinely improves their wellbeing and reinforces the fact that you value them.

In summary, a good financial wellbeing strategy goes beyond token gestures and one-off initiatives. It provides a culture-wide message that, as an organisation, you want your employees to be confident and knowledgeable with their finances in a way which enables them to make the most informed decisions for their lives. This affirms your commitment as an organisation to provide them with the help and support as and when they need it.

For more information on how Morrinson Wealth Wellbeing can help in the development and delivery of your financial wellbeing strategy, please contact us at:

  • Info@morrinsonwellbeing.co.uk

PRBN – Ensuring Everyone Benefits, Nov 2019
The Employer’s Guide to Financial Wellbeing 2019-20 - Salary Finance
Holkar M. Mental health problems and financial difficulty. Money and Mental Health Policy Institute. 2019.
The Employer’s Guide to Financial Wellbeing 2019-20 - Salary Finance
Money & Mental Health 2018
Holkar M. Mental health problems and financial difficulty. Money and Mental Health Policy Institute. 2019.
Financial Well-being: the employee view - CIPD – Jan 2017

Hannah-Rebecca Findlay

Hannah–Rebecca Findlay has an extensive background working within the financial services industry. Having spent over 3 ½ years working in private wealth management, she is adept at helping people manage their finances. Currently Operations Manager for Morrinson Wealth Wellbeing, Hannah is passionate about financial education and empowering people; through assisting organisations to increase the financial wellness of their employees (and in turn improve their bottom line).

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