What is financial wellbeing?
Financial wellbeing focuses on how an individual feels about money, and the impact that personal finances have on their overall wellbeing. It is an important aspect of employee wellbeing and many organisations choose to include it as an employee benefit.
The Money and Pension Service defines it as “knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future. In short: feeling confident and empowered about your money”1.
There are multiple definitions, all with a common theme, which can be summed up as:
- Confidence – to make informed decisions about money
- Control – of everyday budgeting and spend, debt management, short-and long-term savings
- Capacity – to absorb a financial shock such as an emergency cost or redundancy
Financial wellbeing is not simply about a lack of money worries, as anyone can experience financial stress from time to time. It’s about not being constantly worried about money, and having the capacity to manage everyday expenses as well as save for the future.
Why should it be part of an employee benefits package?
Money worries can be a significant cause of stress for employees at all salary levels, age groups and demographics, impacting mental health. Research conducted by the CIPD found that one in five employees regularly loses sleep worrying about money2, and a study by the Money and Pension Service found that employees with high financial stress took on average twice as many days off sick compared with those in a low financial stress group3. Organisations that offer employees financial wellbeing services are providing a valuable benefit that goes beyond the financial benefits of money management.
How do employers benefit?
Including employee financial wellbeing as part of a company’s benefit strategy can also lead to a number of tangible benefits for the employer, such as:
- Reduced employee stress and anxiety
- Reduced absenteeism in the workforce
- Increased productivity and performance
- Increased talent retention
- Greater appreciation of employee benefits which can lead to increased employee engagement and employer advocacy
How can Gallagher help?
As experienced employee benefits consultants we understand that what individuals know, feel and do about money and their personal finances has a direct impact on their emotional, mental, and often physical health.
Our employee financial wellbeing solutions have been designed to improve what employees know, feel and do about their personal finances. They are used by leading brands and organisations in their employee benefit packages.
Gallagher’s expertise and simple approach can deliver measurable improvements in financial wellbeing for each individual employee.