TALK MONEY WEEK 4–8 NOVEMBER 2024 – #TalkMoney
Every year, people are encouraged to have more open conversations about their money – from pocket money to pensions – through the Talk Money Week campaign.
This year, the campaign will be held between 4-8 November 2024 with a simple call to action: Do one thing.
The Money and Pensions Service are asking you to encourage the people you employ, support or serve to do one thing that could make a positive difference to their financial wellbeing. It could be as simple as checking their credit score, talking to a child about pocket money or using one of the free tools or calculators on the MoneyHelper website.
The goal of Talk Money Week
Talk Money Week provides a platform to have a conversation about money between families and friends, at work or at school or any other walk of life. The goal is to empower people who may be feeling the squeeze, struggling with bills or worried about what the future may hold, to find a way forward.
Why is this important?
How financial stress can impact workplace wellbeing
Financial stress can impact workplace wellbeing and there is recent evidence of how the UK population is facing a savings crisis. A quarter of adults have less than £100 tucked away, and one in six have nothing.
While the macroeconomic climate is adding to these pressures, it is not the only factor at play. The financial system is stacked against half of the working population.
Shift-based and frontline workers have been priced out by traditional finance; either they are charged more than the other 50 per cent, or they are not given access at all.
This is true across a broad range of financial products, ranging from credit and insurance, right through to energy and mobile phone tariffs.
This is not just a personal finance issue, it is a growing concern for employers too: the productivity penalty and health costs of financial stress.
So what actually is financial wellbeing, and why should employers care about it?
Financial wellbeing can be defined as a person’s ability to make the most of their money and finances on a day-to-day basis, dealing with the unexpected, and being on track for a healthy financial future. The Money & Pensions Service defines it as “financially resilient, confident and empowered”.
When someone does not meet this definition, there can be significant effects on their mental and physical wellbeing – effects that inevitably show up in the workplace.
There is no denying education is important, but recent research shows that a focus on this is a red herring. Money worries can impact someone so deeply, that it costs them up to 13 IQ points, according to Scientific American Mind. This is a significant amount, taking someone with average intelligence down to a category called ‘borderline deficient’, and is more impactful on performance than losing a night’s sleep or the effects of chronic alcoholism.
At work, employees are less able to make sound decisions, less productive, and less capable of controlling their emotions and impulses – and it does not stop there.
As well as impacting cognitive function and ability, money worries can have psychological health impacts including anxiety, depression and feelings of shame and guilt, which can manifest physically into sleep problems and a decrease in energy levels.
These issues are not happening on a small scale either. In a 2024 survey, 60 per cent of employees said they worry about money at least once a week, with 21 per cent worrying about their finances every single day.
Employers want to help, and this extends beyond pay raises to include initiatives that improve access and affordability of essential financial services, to alleviate money worries.
The rise of workplace initiatives
Since the cost of living crisis began, financial wellbeing support has been a permanent fixture on the boardroom agenda. While this once looked like ad-hoc tactical solutions, businesses are now upping investment in inclusive workplace finance, offering new types of financial wellbeing benefits to staff.
This is more than just cycle to work schemes, train ticket season loans and staff discounts; this is employers stepping in to replace traditional finance, by closing the gap in access to fair products – fairer, cheaper, financial products and services, tailored to the needs of their people.
By 2023 a large proportion of UK employers had moved to offer support with one-off tactical initiatives, like hardship funds and employee loans.
Watch out for workplace savings
One area of support that employers should expect to hear more about is workplace savings. Research published by the University of Bristol has shown that regular savers are more optimistic, more satisfied with life and sleep better, and aware of the savings behaviours that they should adopt.
Similar to the auto-enrolment of pensions, auto-enrolment savings see employees who meet certain criteria automatically being made a member of a savings scheme, without needing to ask to be a part of it. Employees still have the choice to opt out and, unlike pensions, their savings are accessible any time they want to use them.
While the responsibility of introducing these schemes does not lie with the employer alone, they should recognise the power of interventions and nudges that go with the grain of what people say they want to be doing, which is saving.
Final thoughts
Given that shift-based and frontline workers are more vulnerable to financial pressures, that is a huge majority of the workforce vulnerable to financial stress.
Long-term sickness now accounts for more than 30 per cent of inactivity, according to the Office for National Statistics, and we are seeing the “longest sustained rise” since records began. Supporting the financial wellbeing of employees is not only the right thing to do, it makes business sense.
There is a clear business case for levelling the financial playing field for employees, with improving productivity for more than a quarter of a workforce, reducing churn and boosting recruitment all compelling organisational benefits with a strong return on investment.
While major financial institutions often contribute to this pressure and do little to help, employers are, for many people, the only positive financial relationship they have in their lives.
This is no longer a nice-to-have for organisations, it is a must-have.
This gives businesses a unique opportunity to ensure their employees are financially resilient, and by getting the right solutions in place they will reap the rewards of enhanced productivity, job satisfaction, retention and recruitment.
Source:
Selections of Article used from one written by Emily Trant is chief impact officer at Wagestream whose article featured in the FT along with information provided by the Money and Pensions Service about Talk Money Week.