Finance | Mental wellbeing: why money matters

Mental wellbeing: why money matters

Salary Finance’s research has demonstrated a clear, and sobering, link between poor financial wellbeing and mental health.

We surveyed over 10,000 people to better understand the impact of personal money matters on their lives at home and at work. The survey found that 40% of UK employees are worried about money, more so than their relationships, health or career.

The most shocking statistics we discovered related to mental health. We found that employees with financial stress were:

  • 3.8 times more likely to suffer from anxiety and panic attacks.

  • 4.9 times more likely agree with the statement “I feel depressed and find it difficult to carry on with life.”

Responses to these questions were more influenced by financial stress than age, earnings, or anything else, indicating a strong, interconnected relationship between mental and financial wellbeing.

Financial wellbeing & mental health: a two-way street

Research by the Money and Mental Health Policy Institute in 2017 found a similar connection between finances and mental wellbeing. The research found that 41% of employees that identified themselves as financially comfortable reported at least one sign of poor mental health. This rose to 51% for those just about managing and 67% for people in financial difficulty.

The research found the top three ways ways financial difficulties impact people at work:

  1. Struggling to focus on work tasks

  2. Sleep deprivation and acute symptoms of poor mental health

  3. Spending time on financial issues at work

Comments from the study’s focus groups highlight the two-way street between financial stress and mental health. Money can be at the root of mental health issues but, at the same time, poor mental wellbeing makes it more difficult to manage finances, or do the work that people rely on to make money. The two play off of each other, for example:

“Every month I had to hit targets to get bonuses as the basic pay was not quite enough to live on. When the brain fog started with my depression I found it increasingly difficult to hit those targets, which created more stress and pressure from managers which further pushed me down.”

“I spend more time thinking about how I am going to help clear the debt we have, if people are going to come knocking at my door rather than concentrating on what I am supposed to be doing.”

Image: Overstretched, overdrawn, underserved, Money and Mental Health Policy Institute, 2017

What can employers do?

First, create an understanding in your organisation about the relationship between mental and financial wellbeing. They are too interconnected to be addressed separately.

Three steps you can take are:

  1. Help break down the stigma and encourage openness. We all have mental health and money plays a big part in it.

  2. Build financial capability with accessible financial education that coaches rather than preaches.

  3. Make sure you offer financial benefits that allow people to take action and make a positive change. Improving financial education is essential, but if an employee is excluded from mainstream credit they may not be able to take action on advice to pay off debt. Providing a route out from under the weight of debt can have a huge, same-day positive impact on their wellbeing. Adding the capability to start a savings habit can create the foundation for a new, more financially secure future.

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