Last year, it was recorded that household debt in the UK was ‘worse than at any time on record’. The average total debt per household, including mortgages, was £59,288 in October 2018, which is over £30,000 per adult.
Given these statistics it’s likely that every employer will, at some point, employ someone who is experiencing financial difficulties. Yet, around half of employers think that their employees’ financial wellbeing is not their responsibility. However, one of the biggest reasons that automotive industry people contact Ben for support is because of money worries, particularly debt and low income.
Employees who are worrying about money are likely to be stressed, and even anxious, so they are less likely to be focused and may make more mistakes at work. As a result of the stress they are under, they are also more likely to take time off work for illness.
Studies have shown that debt also has an impact on mental health – it can make existing mental health problems worse or actually cause a mental health problem. One in four British adults with a mental health problem also struggle with problem debt and those with problem debt are twice as likely to develop major depression as those not in financial difficulty.
Martin Lewis, Founder of Money Saving Expert, says: “Be under no illusions. Mental health problems can cause severe debt, and severe debt can cause mental health problems.”
So, with that in mind, we have put together some guidance for employers to help them support their people with money problems:
- Share our resources
We have just launched our new debt webpages to help people who are struggling with money worries. As an employer, you can spread the word and share these resources with your employees through your available communications channels so they know that they can always turn to Ben.
- Financial education
Many adults struggle to manage their finances due to financial products, such as pensions and loans, becoming more and more complicated and a lack of financial education at school. About 17m workers possess the numeracy skills of a primary school child, according to research by charity, National Numeracy and estimates poor numeracy could cost the economy £20bn per year.
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.
- Consider paying a living wage
With a 5.7% decrease in the average real wage, more people are struggling to make ends meet. Also known as the ‘real Living Wage’, The Living Wage Foundation offers accreditation to employers who pay an independently calculated Living Wage (this is different to the Government’s ‘National Living Wage’). It’s based on what families need to live and, at January 2019, it stands at £10.55 per hour for London and £9.00 per hour for the rest of the UK.
According to the Living Wage Foundation, 93% of Living Wage business have reported benefits since becoming accredited. Additionally, 86% of Living Wage employers reported improved business reputation and 75% said that staff motivation and retention rates improved.
- Create a culture of support
Creating a culture where employees feel comfortable about seeking support can make all the difference. Recognising that financial stress is usually temporary and not a sign of the employee’s character is important, as is letting your employees know where they can turn if they are in financial difficulty.
- Refer your people to Ben
Ben can work with your employees on topics such as money management, budgeting, debt advice and retirement planning. Spread the word about Ben in your company – they can get in touch by using the contact details on this page: www.ben.org.uk/contact-us.