Cost of living | Why your mental health strategy needs to focus on financial wellbeing

Why your mental health strategy needs to focus on financial wellbeing

By Jason Butler, Head of Financial Education at Salary Finance

Employees are struggling with financial wellbeing

We’re all going through a rough patch at the moment. It won’t be news to you that we’re facing escalating expenses which are putting millions of us through a cost of living squeeze.

Our recent cost of living research highlights that 53% of UK employees are struggling more with their finances since Covid-19 and 70% find themselves short by £600 annually – with 2 in 3 of those short by £1,200 each year.

Finances are affecting mental health & productivity

There’s an undeniable link between someone’s finances, their mental health and ability to be productive at work.

Our research shows that 82% of working people worry about their finances at least once a week. Of those, 51% say they worry daily – twice as many compared to last year.

And the mental health impact is clear – 95% of those who worry about their finances say it has a negative impact on their mental health.

A positive is that 3 in 4 employees agree their mental health would improve if their employer gave immediate financial wellbeing support and benefits. That’s working people in the UK directly saying they need and want help with their finances.

These issues should make businesses take note, especially as 40% of employees say their financial wellbeing affects their ability to be productive at work. This is costing businesses £28 billion a year due to 38.9 million hours each week being lost to poor financial wellbeing.

Supporting your people during tough financial times isn’t just morally right, it can increase employee productivity as well. They’re two compelling reasons to invest more time, effort and resources into your employees’ financial wellbeing.

Incorporating financial wellbeing into your mental health strategy

So we know that working people’s worsening finances are affecting their mental health and ability to be productive – but what can you do to improve your wellbeing strategy?

Here are three practical steps:

1. Acknowledge the cost of living squeeze

Your organisation has to acknowledge that we’re all facing difficult financial times right now and be sympathetic to the fact that a significant proportion of your people might be struggling. Outline what financial help and support they can get right now, including signposting existing benefits and external resources.

That level of openness and transparency is powerful because it shows employees you're not trying to pull the wool over their eyes but there to actually support them.

2. Open up about money in a relatable way

Who leads the financial wellbeing conversation in your organisation? Senior leaders need to be on board, but are employees likely to resonate with a CEO earning many times more than them?

Some of the most powerful voices in your business are those who might be perceived to have less status and power. Your people will resonate much more with the stories, insights and opinions of colleagues like them, as well as not feeling they are on their own.

3. Help managers to support financial wellbeing

Upskill managers and other trusted voices in your business on the financial wellbeing benefits you provide and empower employees to feel comfortable to talk about their situation. Only then will employees get the right financial support, enabling them to be more productive and mentally fit for work.

For more on this, we’ve put together a guide on three ways to help managers support financial wellbeing which you can get here.

Get a deeper understanding on the cost of living impact

We surveyed 1,000 working people across the UK to give you a deeper understanding of how the cost of living squeeze is impacting financial wellbeing and mental health.

In our report, Backing Your People Through the Cost of Living Squeeze, you'll see how employees are coping with their finances and get tools you can use to support your people right now.

Download report