Let’s talk about money…

More than a quarter of employees are worried about their financial situation – more so than their career, health or their relationships – yet 81% still don’t feel comfortable talking about financial concerns at work. These figures, from The Employer’s Guide to Financial Wellbeing 2020–21, by our partner Salary Finance, point to the stark reality of a society where people need help but aren’t comfortable asking for it.

“It’s not surprising that money is still a taboo in our society. We are taught from a young age that talking about money is impolite and that we are either ‘good’ or ‘bad’ with money. This creates a toxic combination that fuels the reason why so many people feel shame about their financial health,” explains Zarina Sahni, Salary Finance’s Head of Insight.

The impact on individuals

The report reveals that employees are less comfortable talking about their finances than their mental health. The sad truth is that those with poor financial wellbeing are also more likely to suffer from poor mental health: these individuals are nearly four times likely to feel depressed and more than five times likely to suffer from anxiety.

“They say a problem shared is a problem halved, and money issues are no different from talking about any other worries or concerns,” says Sahni. “We all need an environment where we feel happy to talk about money, with people we can trust and who will be honest with us without judging us. When people don’t have this kind of support, they are at much higher risk of worries turning into ongoing anxiety or depression.”

Equally concerning is Covid-19’s impact on people’s attitude to saving. The Samaritans charity has noted a marked increase in the number of calls about financial worry during lockdown, while the report reveals that more than 40% of employees are more stressed about their finances since the lockdown period began. Many people are financially supporting others during the pandemic, and the people offering financial support are 1.7 times more likely to suffer from poor financial wellbeing than high financial wellbeing. Some 44% of people, moreover, say the pandemic has had a negative impact on their money situation. This has led to some employees concluding that they can’t consider long-term financial planning, and as a result are, worryingly, thinking about reducing the amount they’re paying into their pension.

The impact on businesses

These worries don’t just come to those on lower salaries. Those who earn between £10,000–£30,000 annually have almost the same level of financial worries as those earning over £90,000. Senior job roles also tend to result in financial concern: 33% of C-Suite executives, 38% of directors and 30% of managers and team leaders report having money worries.

This has an impact on business, too. The current level of financial concern costs organisations up to 29 productive days annually. More money is needed for recruitment and training, which in turn costs the organisation up to 17% of the individual’s salary.

Asesh Sarkar, Salary Finance CEO and Co-founder, says: “Covid-19 has highlighted that there is some way to go in creating equality in a diverse workforce, as measured by the impact on financial wellbeing. This simply accelerates the need for employers to prioritise financial wellbeing in the workplace, which has moved from a ‘nice to have’ to a ‘must have’.”

At Legal & General, we believe that trusting your employer and feeling that they care for your wellbeing have never been more important. While lots of companies provide long-term financial planning solutions, these tend to help those who are already financially healthy, leaving those who are struggling alone and worried. “There are lots of people who are struggling day to day and need help to get back in control of their finances before they can even start to think about the long term,” explains Sahni. “Employers need to offer inclusive financial wellbeing benefits that serve the needs of all their employees.”

Download the Salary Finance report here.