Covid has had an unprecedented effect on the UK economy and the country’s struggles have been much reported, but individual security has seen less publicity. However, personal debt is rising, and many households are facing financial difficulty, especially those with unsecured debt. In addition to the personal turmoil, employees struggling with money will not have their usual focus on work and employers may find that standards slip and output suffers.
There can be little doubt that many employees are concerned about money and their financial future. Money worries are a major cause of depression and anxiety, and trying to control finances is time-consuming, all of which can have a big impact on productivity.
Financial impact of Covid
The Money Charity’s latest September statistics show:
- Average total debt per household: £62,670
- Total unsecured debt per UK adult: £3,734
- Average credit card debt per household: £2,030
- People in the UK owed an extra £1,189 on average compared to July 2020
This coincides with increases in housing costs:
- First-time buyer house prices increased by 7.7% in the year to July 2021
- Council tax increased by up to 7.5% in April 2021
- Rising energy prices, with the Price Cap increasing by 12%
Money worries affecting wellbeing
Supporting employees’ financial health is as important as looking after their physical and mental health, and they are intrinsically linked. Mental health can affect the way people deal with money, making them overspend or struggle to keep up with financial management. Equally, money problems can affect mental health, triggering anxiety, and leading to sleep problems and depression, which can all affect physical health.
- People with mental health problems are three and a half times as likely to be in problem debt
- More than 100,000 people in problem debt attempt suicide each year
Helping staff stay financially healthy and enabling them to work without the stress of worrying about money is an essential part of keeping a company productive and efficient.
Offering security through benefits
There are many ways that employers can help support the financial wellbeing of their staff. For instance, health and wellbeing benefits can save employees money by providing things like physiotherapy or counselling, which would otherwise have to be paid for from the employee’s own pocket.
Employee assistance programmes (EAPs) can support financial wellbeing with debt and budget management, as well as helping with the mental and emotional impact of debt and money worries.
Group risk benefits (employer-sponsored life assurance, income protection and critical illness) can provide financial protection for employees and their families. Providing an employee with financial support if they suffer a serious illness like a heart attack, stroke, or cancer can give security and peace of mind. Employees can also be offered financial support if they are absent medium- to long-term because of sickness or injury, as well as essential rehabilitation services to help them recover more quickly and safely. Such options can provide a financial lifeline in times of great uncertainty.
By providing such support for financial wellbeing, employers can find themselves being rewarded with improved engagement rates.
The pandemic has focussed attention on health and wellbeing like never before. Supporting employees’ financial and mental health should be at the top of every employer’s HR strategy. Employers who do not have benefits in place should investigate the most appropriate options, while those who are already providing financial security should consider an audit to ensure they are offering the best possible support and maximising the fantastic additional services which are now available.