The trouble with money

The emotional nature of money means that financial concerns are now more stressful to people than their work or relationships, with almost three quarters of us saying we feel stressed about our finances.

by | Oct 5, 2020 | 0 comments

If you’ve ever stood at a checkout and had your card declined, you’ll know that money can often make us feel pretty bad about ourselves. Some of the most common emotions we associate with money are embarrassment, anger, fear and shame. Worryingly, when we aren’t confident in our financial situation, our wellbeing is negatively impacted. According to the YMCA, there is a 52% difference in wellbeing between the most and least financially confident people in society. When you are happy with your finances there is a 19% uplift in overall wellbeing. Those who are worried about their money see a 33% drop.

The Money and Mental Health Policy Institute has found that the relationship between our finances and our mental health is cyclical. They found that those experiencing mental health problems are one-and-a-half times more likely to borrow money than those experiencing good mental health. Over two thirds of people struggling financially report at least one sign of poor mental health. More than half of UK adults are worried their mental health is being affected by money worries.

People don’t like making decisions about their money. We put money decisions off for as long as we can, and most of us only act when we absolutely need to. Researchers have looked at emotional decision-making and found that the way we deal with complex money decisions differs greatly from other areas where we make complex decisions. So, it’s unsurprising to find that 7 out of 10 of us admit to postponing financial decisions.

The reason for our reluctance to make decisions about our money is widely debated, but several explanations that top the list are the feeling that we lack the right skills, that financial products are complicated, and we are overwhelmed by choice. Half of us admit to spending more time choosing biscuits than on our financial planning (Schroder’s Personal Wealth Survey, 2019). The majority of employees don’t even understand their payslips and almost half don’t understand the value of their benefits package.

Two in five UK employees say they worry about money ‘always’ or ‘often’. This stress is causing employees to lose sleep and it’s affecting their concentration at work. When employees worry about money, they take between 1.5 and 3 days off work sick each year. Worrying about money can affect us so much it can even lower our IQ. It is estimated that employers are losing between 13% and 17% of their payroll costs due to poor financial wellbeing alone. The lack of knowledge (compounded by the lack of quality Government support and school-based financial education), the impact on our work and the overall effect on our mental health is driving employers to think more seriously how they support their staff with money worries.

For most of us, money is synonymous with work. Our workplace is not only where we get most of our money and pay most of our tax, it’s also the place we are already making some pretty big financial decisions. After a mortgage, pensions are the financial product we put the most money into – and it’s likely our pension will be held via the workplace. When we embarked on research alongside King’s College London earlier this year, we discovered that many HR teams felt their employees were being overwhelmed by the complex decisions they were being expected to make regarding their benefits – including pensions. But employers aren’t doing enough. Less than half of employers currently offer programmes to help their staff make informed financial choices and boost their overall financial wellbeing.

With little help elsewhere, employees themselves are now gravitating towards employers who support them when they are worried about money. Over three quarters of employees think their employer should help them with their finances. When employers do offer workplace financial education and support, the positive impact can be huge. HR software provider, Zellis, found that – when it’s offered – workplace financial help would have a positive impact on the personal situation of 88% of employees. Two thirds say they would feel more looked after at work and a third said they’d be more loyal to their employer.

Chief Economist at the Bank of England, Andy Haldane, says the UK is the only OECD country where our literacy and numeracy skills are getting worse. The problem is so big that Haldane believes improving financial literacy is one of the ‘big six’ issues that could mend society’s inequalities. What’s more, we have strong evidence that financial education works. A meta-analysis of 126 studies found that financial education significantly impacts financial behaviour and, to a larger extent, financial literacy. Financial education can help employees to have more confidence in their money, remove some of the complexities of financial decision-making, and help employees make better-informed decisions. When this happens, we start to develop more positive emotions around our finances.

I’ve often thought that money is sometimes less about how much we’ve got and more about how we feel about it. If employers want to make a real difference to the mental and financial wellbeing of their people, and help prevent future financial struggles, financial education can ensure employees are prepared for life’s inevitable knocks. Financial education is the key to healthier finances and better mental health. It’s time that every employer committed to helping their staff stay financially healthy.

Benefex can help you on your journey to better financial wellbeing for your employees. Continue reading at


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