Financial wellbeing in 2025 is set to reclaim its place at the forefront of workplace wellbeing strategies.
The aftermath of the cost-of-living crisis looms strong and has left a lasting impact on employee finances. In light of this, employers will be called upon to prioritise financial support this year in ways that resonate deeply with their workforce.
The cyclical relationship between money and mental health
Almost 3 in 4 employees are entering 2025 concerned about the loss of their savings buffer due to the economic environment. These concerns are driving poor mental health among 45% of the workforce. In fact, the state of the economy is now the most important issue for employees in almost every region.
When employees worry about money, this can trigger a stress response which reduces their resilience to wellbeing challenges including mental health. Around half of employees now say that money negatively impacts their mental health and that this, in turn, is impacting their ability to work effectively.
This is because of a clear and cyclical relationship between money and mental health. Several large and recent studies (from American Psychologicial Association, Amsterdam University of Applied Sciences and Science) have proved this bidirectional relationship.
Savings as a wellbeing benchmark
Financial wellbeing correlates with overall wellbeing in several intricate and compelling ways. For example, the size of an employee’s savings account is a big contributor to overall wellbeing.
Half of working-age adults with poor wellbeing have no savings at all. Furthermore, across almost all income levels, there is a correlation between employees’ savings accounts and their overall wellbeing. Most of the evidence points to those employees who can build up stronger savings accounts having a better relationship with money, feeling less anxious about money and reporting higher overall wellbeing.
When employers are able to support their people to build bigger savings pots, the impact can reach far beyond individual wellbeing improvements.
In response, we will likely see the re-emergence of employee discount schemes in 2025. These will help support employees with building up financial resilience without increasing their outgoings or adjusting their spending.
For employers, this is about making pay go further when wages can’t rise – or don’t rise very much. And there is compelling evidence that when we support employees with savings, their wellbeing also improves. The more money someone saves each month, the higher the likelihood that they will be “mostly” or “completely” satisfied with their life. This impact is especially stronger among employees with lower incomes.
Saving makes us feel good
Saving money on products and services has an interesting effect on employee wellbeing. Aside from the positive effects of saving money (like enjoyment and excitement), savers also experience a 14% spike in Oxytocin, the “feel good” hormone.
When employers are able to support their people to build bigger savings pots, the impact can reach far beyond individual wellbeing improvements. We even have evidence that family life gets better with even small increases in savings accounts. Employees who save money tend to have better quality sleep too. One study examined people over ten years and found that the more they saved and the more regularly they saved, the lower their financial anxiety and the better their sleep.
Financial wellbeing in 2025: The Path to £1,000
75% of Brits agreed that a savings account of £1000 would make them happier than spending £1000.
We have some interesting new evidence showing us exactly the amount of savings we should aim for.
In 2024, YouGov found that those with less than £1000 in savings were almost three times more likely to feel they had poor mental health compared with those with more than £1000.
Furthermore, research conducted by Atom Bank found 75% of Brits agreed that a savings account of £1000 would make them happier than spending £1000. This seems to be the magic amount – and if we get more employees to it, workplace wellbeing will improve along with engagement and productivity.
Wellbeing support is just as important as salary
While lauded as a trend by many following the pandemic, the evidence holds firm that employee expectations over how their employer supports their wellbeing continue to rise.
Employers are expected to claim they care for their people more than ever in 2025. However, there is a growing ‘employee care perception gap’– a 28% difference between how employers felt they cared for their people and how cared for their people felt.
For the year ahead, employers must better demonstrate how much they care by providing more benefits designed to support their people.
For the last few years, the number of employees who believe wellbeing support is as important as salary has steadily increased. In 2022, 93% agreed with this statement – a figure that is expected to increase further in 2025.
A final note on wellbeing support and retention
Before wrapping up this spotlight on financial wellbeing in 2025, take note. Among those employers who provide benefits to support and improve the wellbeing of their people, far fewer are planning to leave and far more say they work harder.
As a result, just under half of global employers say rising costs are their primary reason to invest more in wellbeing. This signals that employers who do more in this space, will reap the benefits of doing so.
