The Money and Pensions Service’s (MaPS) Chief Executive, Caroline Siarkiewicz, discusses why focusing on financial wellbeing is even more important in the wake of recent cost-of-living increases.
Many people are worried about money right now, yet research shows that just talking about it can help to build a sense of overall wellbeing. Talk Money Week aims to encourage these money conversations, and to help businesses and organisations to showcase support and information that individuals can access. However, it’s vital that these conversations continue throughout the year.
Over the past few years, we’ve become well acquainted with terms such as ‘unprecedented times’, and although many of us would probably like a break from this phrase now, it’s fitting for the money pressures currently being experienced throughout the UK.
With bills and food prices having increased significantly, both individuals and businesses are understandably feeling stretched. And while it may be tempting to focus on short-term fixes, it’s clear that it’s in everyone’s interest to make financial wellbeing a priority, now more than ever.
What is financial wellbeing?
MaPS defines financial wellbeing as feeling secure and in control. It is about making the most of your money day-to-day, dealing with the unexpected, and being on track for a healthy financial future. In short: financially resilient, confident, and empowered.
Financial wellbeing doesn’t necessarily mean saving. For an individual, improving financial wellbeing can be as simple as knowing where your pensions are and what’s in them, or knowing where to turn for help should you find yourself in financial difficulty.
Why financial wellbeing is important during cost-of-living pressures
Financial wellbeing is important because we know that it has a knock-on effect on almost every other aspect of life: physical and mental health, relationships and working life can all be affected, both now and in the future.
For employers
The case for employers talking about money and implementing strategies to improve financial wellbeing, even at times such as this, is simple and compelling: money worries are bad for businesses.
They’re the biggest cause of stress for UK employees and can often result in staff sickness. Approximately 4.2 million worker days each year are lost in absences because of a lack of financial wellbeing; it’s the equivalent of £626 million in lost output.1
Enacting financial wellbeing strategies, such as helping an employee understand the difference between types of pensions or offering them the option of taking part in payroll savings schemes, can help them feel more secure in the face of financial challenges.
Employers seeking advice on how to implement financial wellbeing in their business can contact the partnerships team in their area.
For healthcare providers
The link between money and mental and physical health is well established, and MaPS has made mental health a key cross-cutting theme of the UK Strategy for Financial Wellbeing.
It’s always essential that people with mental health problems can access financial wellbeing support, but evidence shows that current pressures are already having an increased negative impact on mental health2.
For organisations that support people within a healthcare context, ensuring that financial wellbeing resources are made available is key to futureproofing. Financial worries can make existing health problems worse or cause new ones, and patients may need support on both health and money issues.
Access resources and advice on how to promote financial wellbeing in a healthcare setting.
Local authorities
Whether it’s by supporting families who need housing, looked-after children, older people, or anyone in between, local authorities have unique levels of access to help and assist those experiencing financial hardship.
We know that during difficult times it’s often the most vulnerable who are hardest hit, and so focusing on financial wellbeing is an even more important way of supporting people in your area and strengthening the services you provide.
Find resources for improving financial wellbeing for local authorities, including housing and schools.
Where can people turn to for guidance?
MoneyHelper
You can direct employees, customers or the people you support to our MoneyHelper website, which provides free and impartial money and pensions guidance, and makes it quicker and easier to find help tailored to individual needs.
Resources available on MoneyHelper include:
- Guides to Help with the cost of living
- A bill prioritiser tool
- Guides to everyday money matters in our sections on Credit and purchases, Pensions basics and Banking
Debt Advice
We know that debt advice works and has a transformative impact on people’s lives and wider society. Cost-of-living pressures mean that making sure people know where to turn when struggling with debt has never been more important.
People can find free guidance on managing debt via the MoneyHelper website, including:
- a debt advice locator tool to connect people to a free debt advisor
- a guide to talking to creditors
Pensions Guidance
Pensions may seem less important at times such as this, but thinking of our future selves remains important – especially when you consider that it’s possible you’ll end up enjoying retirement for more years than your working life.
MoneyHelper’s pensions guidance can be accessed online or by phone, offers support with understanding different aspects of pensions and put callers in contact with the groups best suited to support their needs.
References
1. Centre for Economics and Business Research, Financial wellbeing and productivity: A study into the financial wellbeing of UK employees and its impact on productivity, 2018.
2. Wagestream, State of Financial Wellbeing: The Cost of Living Report 2022.