a sense of security from the feeling you have enough money to meet your needs. It’s also about being in control ofAviva
your day-to-day finances and having the financial freedom to make choices that allow you to enjoy life.
The current pandemic has changed many aspects of our lives from our way of living to how we work. It has also changed the way we handle finances. The job market in the last year has become increasingly tough for many. With many people out of work an, an awareness of financial wellbeing is now more important than ever.
Statistics and Findings on Financial Wellbeing
- Those working in the retail sector or who have disabilities are more likely to rate their mental wellbeing as bad or very bad.
- 68% of people with poor financial wellbeing think they are organised with their money and make considerable efforts to minimise debt.
- 24% of employees feel they have made a bad decision regarding debt during the pandemic.
- More than half of 18 – 24 year-olds also feel they have made poor decisions regarding debt throughout the pandemic.
How Finance Affects Mental Health
The research on the link between finance and mental health is widespread. The Money and Mental Health Institute estimates around 1.5 million people in England experience problems with finance and mental health. Socio-economic factors in the last year such as the repeat lockdowns which put much of the economy on hold has caused greater financial inequalities. Many have been left with great anxiety about how to produce sustainable income and be able to afford a desirable future in an increasingly expensive economy.
Research by Aviva shows the negative impact the pandemic continues to have on financial security and mental health with 39% of people saying their finances are directly affecting their mental health.
Supporting Young Workers’ Financial Wellbeing
Young workers throughout the pandemic prove to be the most vulnerable with regards to financial wellbeing. Many postgraduate students trying to find work struggle to obtain vital work experience to help their careers grow. This is as there are less jobs in the market and therefore less opportunities for growth. The direct impact this is having on financial wellbeing is evident with over half of Gen-Z workers stating they have made poor decisions regarding finance in the last year.
Employers have a key duty in supporting young workers with their financial wellbeing. One way employers can provide support is with financial education. Young people may often lack valuable experience when it comes to managing money effectively and can significantly benefit from guidance. Additionally, implementing seminars on mental health as a whole can be effective in ensuring young workers feel supported and that they can discuss mental health. Seminars may include a discussion on the effect that finance can have on mental health, and where employees can receive support.
How Personality Affects Financial Wellbeing and Additional Support
Personality plays a huge factor in how people perceive their financial wellbeing. Not everyone with poor finances necessarily perceive themselves as being bad with money. This is seen with some of the stats mentioned prior from the Aviva report. For example, 68% of people with poor financial wellbeing think they are organised with their money. A further 64% state they make considerable efforts to minimise dept.
Aviva splits personality into four different groups; Impulsive Worriers, Resilient Completers, Spontaneous Survivors and Apprehensive Achievers. Each category have unique views on financial wellbeing and can benefit from specific support.
In short, Impulsive Worriers are often unstructured and impulsive members of a workforce. Additionally they are often more prone to negative emotion. These types of people are the most likely to rate their financial situation as poor. (Four times more likely than Resilient completers). Employers should facilitate an improved financial wellbeing for this group by providing knowledge through training. This should include preparation for unexpected events such as the pandemic.
These individuals are often the more disciplined, confident and organised amongst a workforce. In contrast from that of an Compulsive Worrier, this group often report feeling fully prepared for unexpected events that can affect their finances. Employers can support Resilient Completers for their future, by helping them plan for different versions of their future, insuring they have considered all potential options for themselves.
This type of personality often works well under pressure, is quick yet lacks an attention to detail. For financial wellbeing, these individuals are often quite positive in how they perceive their finances. This includes any financial risks such as dept. They often have a much more positive look than that of an Apprehensive Achiever. This is where personality is a really important factor and more specifically, conscientiousness and high conscientiousness.
Furthermore, there is a proven clear correlation between having high emotional stability and having a strong financial wellbeing. Those with high conscientiousness and emotional stability are often better at planning for the future with their finances.
Spontaneous survivors are often relaxed in high pressure positions. However, it is important for employers to help them so that they’re “relaxed” mindset does turn into complacency, especially where finance is concerned.
Apprehensive Achievers can be characterised as individuals who, although determined and disciplined, can struggle in high pressure situations. For these people, being under considerable financial pressure can cause a lot of anxiety and stress. Employers should support these workers by helping them to create clear goals regarding their finances. These goals can be hugely motivating and can build confidence and determination.
Flexible Working and Financial Wellbeing
The Pandemic has ushered in a new world of working with a higher focus on remote and flexible working. Previous Lockdown restrictions prevented people from being able to go to usual office and work spaces resulting in a huge increase in people working from home.
The benefits for some working include an increase in productivity as two out of three employees report greater productivity with flexible working options. Furthermore, flexible working can have big implications on financial wellbeing as well. For many, the ability to work from home helps financially by decreasing costs spent on travel. In a time of great financial uncertainty, providing employees with more flexible working options where possible can make a big difference to financial wellbeing. For more information regarding wellbeing at work and for more HR support, contact us.