Salary Finance recently released The Employer’s Guide to Financial Wellbeing, the ultimate primer on what constitutes financial wellbeing, how financially fit you are, the effects of poor financial health, and what you can do to improve your financial wellness.
The results are taken from their survey of over 10,000 employees from across the UK, covering 25 different sectors, both in the private and public spheres. This comprehensive report documents the financial wellbeing of the nation for the first time.
The report highlighted some staggering realities. 40% of respondents have financial worries, which results in a loss of productivity that costs UK employers £39-51 billion each year – the equivalent to 1.9-2.4% of GDP.
Money worries were found to be by far and away the largest cause of stress. This stress has a corrosive effect on all aspects of employees’ lives; those with financial worries were found to be 4.9 times more likely to suffer from depression, 3.8 times more likely to suffer from panic or anxiety attacks, and 8.8 times more likely to suffer from sleepless nights.
Surprisingly, the youngest age bracket (16-34 year-olds) were found to be the most stressed-out demographic. Clearly, the pressures of paying off student debt, rising house prices, and an ageing population are taking their toll.
In order to assess each individual’s financial wellbeing, Salary Finance created the Financial Fitness Score, and a video that explains this easy to understand scoring system. This score, ranging from 1-5, is based on employees’ answer to 10 behavioural questions regarding money matters.
● Score 1: Regularly run out of money before payday, likely to resort to expensive alternative forms of credit
● Score 2: Not enough money to spend on treats, very limited savings, occasionally reliant on paydays loans etc.
● Score 3: Limited savings buffer (less than one month’s salary) and difficulty dealing with unexpected expenses. Only rely on credit cards and loans in exceptional events.
● Score 4: Have enough savings to deal with unexpected expenses, with more than two months’ wages in savings, and have realistic long-term financial goals that they plan on achieving.
● Score 5: Living with complete financial freedom.
Worryingly, the average score across the UK is 3.1. This means that the vast majority of people are far from being financially well, with only a limited savings buffer.
If you want to find out where you score, visit salaryfinance.com/fitness-score
The Employer’s Guide to Financial Wellbeing is essential reading for employers and employees alike. It’s imperative for people of all ages to understand the importance of financial wellness, and to learn how they can improve their own financial situation.
Dan Cobley, Managing Partner Fintech, said “This report truly goes to show how important financial wellbeing really is – I’m really proud of what we’ve produced. Going forward, we hope that the guide is able to educate a great number of people on how to lead financially healthier lives”.