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.
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.
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.
Benefex can help you on your journey to better financial wellbeing for your employees. Continue reading at https://www.hellobenefex.com/mindset-affects-finances/