By Jools Tait, Business Development Director
A total of 264 people are declared insolvent or bankrupt every day in the UK – the equivalent of one person every 5 minutes and 28 seconds. Meanwhile the average UK household credit card debt is £2,452, which – for a credit card carrying the average interest – would take over 25 years to pay off using minimum repayments (The Money Charity, 2016 statistics).
Given these statistics it’s likely that every employer will, at some point, manage someone who is experiencing financial distress.
In fact, one of the biggest reasons that people contact Ben for support are related to worries about low income.
From a business perspective, employees who are worrying about money are less likely to be able to fully concentrate on their work and may make mistakes which impact on the company. As a result of the stress this causes, they are also more likely to take time off work for illness.
Studies have shown that debt has an impact on mental health. Mind’s ‘In the Red’ survey found that almost 90% of people facing mental health challenges who were in problem debt felt it had made their mental health problems worse. Earlier this month Prime Minister Theresa May said that figures show mental health challenges disproportionately affect those on lower and middle incomes (a view also stated by the Mental Health Foundation).
Offering a Living Wage
Also known as the ‘real Living Wage’, The Living Wage Foundation offers accreditation to employers who pay an independently calculated Living Wage (note that this is different to the Government’s ‘National Living Wage’). It is based on what families need to live and, at the start of 2017, it stands at £9.75/hour for London and £8.45/hour for the rest of the UK.
According to the Living Wage Foundation, employers in London who signed up reported an average of 25% reduction in staff turnover. Additionally, 70% of Living Wage employers reported improved brand awareness and 80% said that staff performance improved.
With financial products, such as pensions and loans, becoming more sophisticated and a lack of financial education at school, many adults are struggling to manage their finances. According to a 2015 YouGov poll, 1/3 of UK adults would like to improve their everyday maths skills. 37% of these stated that this was because they would like to manage their finances better.
Financial education can be as simple as providing leaflets, email newsletters, workshops or 1-to-1 sessions on basic financial management skills. Where possible, the rule of thumb is to offer employees a range of sources to get their information from.
How Ben can help
The Ben team can work alongside your HR and occupational health teams to educate, train and advise managers and colleagues on topics such as money management, debt advice and retirement planning. To find out more, visit our Partnerships web pages.
We also provide advice and support for financial health and wellbeing, including a range of downloadable booklets on topics including budgeting, debt and retirement.