A recent research project by the Money and Mental Health Policy Institute, sponsored by SalaryFinance, sets out the case for employers to provide practical support to employees experiencing financial difficulty, and how this could boost the mental health, wellbeing and resilience of their workforce.
The analysis found a clear link between financial difficulties and poor mental health. Not only do 45% of UK employees report at least one sign of poor mental health, but those with money worries are 50% more likely to report signs of poor mental health that affect their performance at work.
The research found that even less intense financial strain can have an impact on both wellbeing and productivity. 41% of employees who identified themselves as financially comfortable reported at least one sign of poor mental health. However, this number rises to 51% for those just about managing and to 67% for people in financial difficulty.
This is perhaps not surprising when considering the fragile financial situation of a large proportion of the UK workforce. Nearly 17 million working age people across the UK have savings of less than £100, meaning that something as simple as an unexpected repair bill can create a significant issue. Those with lower credit scores will often pay higher interest rates, exacerbating the issue and triggering a cycle of problem debt.
The consequences on an individual’s ability to work caused by financial worries include struggling to concentrate, losing sleep, feeling additional pressure and reduced motivation.
The results highlight a two-way street between concerns about money and mental health, suggesting action to improve financial resilience and alleviate problem debts could play an important role in preventing mental health problems in Britain’s workplaces.
The report suggests actions that employers can take to alleviate these issues for their employees:
- Boost short term savings: Access to savings of just £1,000 could protect half a million households from problem debt.
- Support access to affordable credit: Over half of the research participants suggested that the provision of affordable credit products through payroll would have helped them.
- Foster financial capability: Access to financial tools and apps can help people manage their money more successfully.
The full research report – Overstretched, overdrawn, underserved – can be found at: www.moneyandmentalhealth.org/financialwellbeingatwork/