It's important that employees get help with basic financial capability and makes good sense for employers to support staff through financial education schemes
Yesterday the Prime Minister announced a package of help and protection for consumers, including a stronger regulatory regime for banks, a stop on unsolicited raising of credit and a new white paper on consumer rights.
Annette Cox, Associate Director at the Institute for Employment Studies and head of its Work and Well-being Team, comments on the role employers have in supporting staff:
"Our research shows that workers are already finding that money worries are having an impact on their performance at work. The proposed reduction of credit options is likely to be a prudent move and highlights that some employees may be really struggling to get a grip on their finances during the recession. It's important that employees get help with basic financial capability and makes good sense for employers to support staff through financial education schemes; they get more productive and focused staff, and employees can better manage their money through the downturn."
Research released by the Institute for Employment Studies last week revealed a third of workers feel financial worries affect their performance at work.
'Financial Well-being in the Workplace' reports that at least a quarter of employees are worried about debt, with one in five reporting they are being kept awake at night by financial worries and over ten per cent saying their health was suffering as a result.
The research, launched on 11 March, surveyed workers in both the private and public sectors. It reveals that over 30% of workers do not feel in control of their finances and that those in poor financial health are the least likely to use the financial education offered by their employers.
Report author Annette Cox, Associate Director at the Institute for Employment Studies, comments:
“Employees who report better financial well-being are more likely to report increased productivity. Now more than ever, people are going to need help and support to better manage their finances. Employers are in a good position to do this, and offering even basic information about taking care of your money will go a long way. It’s really important to think about how people who are in most need of financial advice can access it easily.”
Employees who responded to the survey had similar income and debt levels to the UK average. Other key findings from the research include;
40% of employees had made use of financial advice, but are most likely to use sources of information like independent financial advisers and banks or building societies rather than specialist sources like debt advice charities
Just 15% had made use of financial education programmes run by their employer, and those at higher risk of suffering from poor financial health were least likely to use them. But employees who had participated found them useful.
While two-thirds of staff are planning their spending with budgets, just half of these stick to them. People who are vulnerable to or already have money problems are most likely to attempt budgeting.
Only around a third of people felt positive about their financial future and less than one third of respondents thought they would have sufficient savings for their retirement.
Employees with better financial well-being were more likely to report improved productivity
Notes to editor:
Financial Well-being in the Workplace comprises a wide-ranging review of existing literature on this topic, plus surveys of over 1,900 employees in the UK from both the private and public sector. Surveys were conducted during the summer of 2008, at the onset of the global financial crisis, among organisations that had invested in financial education programmes.
Annette Cox is available for interview through the contact details at the end of this release.
The Institute for Employment Studies is the UK’s leading independent centre for research and evidence-based consultancy in the employment and HR fields. Established in 1969, a series of themed events to mark its 40th anniversary started in April 2008.
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