We are a nation that heavily relies on borrowing money – and this does not look set to change anytime soon. But what is the impact of financial debt on health and wellbeing?
It’s not uncommon for people to feel stressed as a result of their financial situation. And this in turn has been strongly linked to impacting physical and mental wellbeing.
Research from Citizens Advice found that nearly 74% of people with debt worries felt an impact on their mental health, 54% felt an impact on their physical health and 79% said they were losing sleep most nights because of debt.
Research from Neyber in 2018 also found that poor financial health affects the way people behave, with 6 in 10 employees stating that they feel that their behaviour changes in multiple ways when under financial pressure.
These changes include people’s internal mindset and attitudes, the ability to concentrate fully at work, personal and working relationships, and how they manage finances and spending.
Taking all of this into consideration, it’s not difficult to see how the knock-on effect of financial worries on people’s behaviour can hamper the wellbeing and performance of an affected employee in the workplace.
How do employers view financial wellbeing today?
Employers are starting to wake up to the fact that financial worries can damage the wellbeing and productivity of employees and, consequently, impact the business’s bottom line.
According to Neyber, of those employers who are implementing a financial wellbeing strategy, 50% stated that the reason for doing so was to improve overall wellbeing and 42% to reduce financial stress among employees.
It’s promising to see that employers understand the detrimental effects of money worries and are being proactive in their response.
It is the more immediate financial concerns – such as the inability to pay household bills or pay off debt on time – that are likely to be causing stress and impacting on health.
How can employers help?
As employers will in most cases be the key providers of income to their workforce, they can use this financial relationship to help support and improve their employees’ financial wellbeing. This, in turn, will help to reduce stress, tackle mental health issues and increase productivity.
The link between financial pressures and mental health is a strong one – and employers need to take a multipronged approach in their strategy for improving employee financial wellbeing that involves preventative measures as well as crisis management.
Here are three key areas to consider when approaching financial wellbeing and mental health in the workplace.
1. Breaking the stigma
While some progress has been made with regards to mental health stigma in the workplace, stigma surrounding financial debt is rarely acknowledged by employers.
Managers and HR professionals need to create a safe environment in which open and honest conversations about financial issues and relating mental health problems are welcome.
By nurturing a culture in which it is OK to discuss and seek support on money woes and mental health, businesses are playing a crucial role in breaking down the taboo.
2. Offer support for more pressing financial issues
Offering education and support on pensions savings is of course important. But employers need to stretch beyond this to help alleviate money issues that are far more pressing to their workers.
It is these more immediate financial concerns – such as the inability to pay household bills or pay off debt on time – that are likely to be causing stress and impacting on health.
Beyond urgent money issues, employers can also play a part in equipping their employees with the knowledge and skills to be financially savvy in the longer-term.
Where possible, provide access to free debt advice, offer income protection insurance and help with any relevant applications for welfare support.
It is also worth considering the option of training front-line managers on how to spot the early signs of financial stress and mental ill health and providing them with the knowledge and tools to have constructive conversations.
3. Build financial resilience
Beyond urgent money issues, employers can also play a part in equipping their employees with the knowledge and skills to be financially savvy in the longer-term and to help with resilience against unexpected costly events.
In terms of education, one option is to run workshops or lunch and learn sessions on different financial topics – eg eliminating debt, credit scores, borrowing advice and tips for saving money.
Another option is to set up a financial wellbeing resource hub page on your company platform providing useful links to relevant, free resources and guides.
Whatever kind of support you decide to provide, make sure you regularly communicate this offering to your employees and ensure your managers are encouraging their teams to make full use of the support available.