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A myth has emerged that financial wellbeing can be achieved by a collection of employee benefits that restrict individuals to a fixed, limited menu of transactions. There is a whole world of personal finance that spans outside of work which needs to be understood and maximised by employees. And the myth that benefits in isolation will improve the financial wellbeing of individuals needs to be broken.
Financial wellbeing is actually an outcome - it’s about having the knowledge and skills to make the most of an income – high or low – and enjoy a comfortable and contented quality of life.
Our recent whitepaper explores trends in financial wellbeing from approximately 300,000 people’s financial habits and stress levels. In doing so, we found real pinch points in the financial stress of individuals which UK employers must address, a couple of which we have explored in this article.
Higher levels of financial stress for those under 32 years old
Our research uncovers that people aged under 32 experience the highest levels of financial stress by a significant margin. Stress levels drop by 18% between the 24-32 and 33-39 age brackets. And employees under 23 years old are nearly twice as financially stressed than those over 53.
As evidenced in the aligning graph, we also found that gaps in the financial education and support for younger people are most noticeable when we look at those who are on higher salaries and still have sustained financial stress. Whilst financial education at UK schools is improving, in many it is not delivered effectively or at all. Employers must pick up the mantel to ensure younger people are supported beyond salary alone.
Female financial stress higher than male, except for when over £60k salary
When looking at levels of financial stress between men and women, the biggest variances occur at the very start and end of their careers. Between age 16 and 23 years, 36% of women experienced prolonged financial stress compared to just 22% of men in the same age group. Between the ages of 53 and 60 years the rates are 20% and 8%, respectively.
Even further disparities between men and women are exposed when considering salary.
Timing here is critical, with our mental health as a nation in decline we are in a situation where financial education and support is particularly important. Not only to reduce financial stress, but also to prevent it occurring.
Our ‘Breaking the great wellbeing myth’ whitepaper examines the extent to which individual financial wellbeing needs differ and constantly evolve over time. It includes: