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Financial stress is a major issue that can affect anyone. According to Healthdirect, money issues can lead to depression, anxiety, and substance abuse.
Morag Fitzsimons, Lockton’s national manager for employee care and people solutions, commented: “Financial wellbeing is no different to and no less important than our physical health and our mental health. And in fact, what the research is showing us is that financial wellbeing actually is the biggest pre-indicator of mental health.”
Many aspects make up our financial wellbeing. A major contributor is the worry about retirement, said Ms Fitzsimons.
“Our younger cohort needs to understand that they’re going to work longer than their parents and grandparents. I think an expectation that everyone’s going to retire at 67 is unrealistic. We already have people in our workforce working into the 70s and 80s. Sometimes that’s because they love work and they want to keep working, but often it’s because they can’t afford to retire at that point.”
She continued: “We’re younger, we’re fitter longer. Am I going to be renting? Am I going to have a house that I’ve paid off? How do I want to be treated when I’m 80? Do I have support around me? Do I have health conditions like diabetes, which means I’m going to have expensive healthcare moving forward that I have to fund? All of that forms part of our financial wellbeing.”
Employers can help workers through financially stressful times by recognising issues and providing support to staff.
Sage outlined five initiatives employers can provide workers in order to look after their financial wellbeing:
- Money management advice
- Salary sacrifice schemes
- Employee discount schemes
- Pensions
- Loans and saving schemes
A big part of staying financially stable is about preparing for the worst. While all may be well in the end, unexpected issues can arise. One study by ProPublica and the Urban Institute found that more than half of workers aged over 50 will be forced to retire in the US.
“[Many of us] will stop work early, not at a time of our choosing; it might be because of our own ill health, it might be redundancy, it could be the ill health of a partner or a loved one, so we have to plan for the worst-case scenario. Unfortunately, human nature is we plan for the best-case scenario,” explained Ms Fitzsimons.
“The mistake we make is we wait until something happens, and then we open that box that is super, and we go, ‘well, this is what I’ve got, what am I going to do with it?’ Instead of the other way around.”
“When we do these reviews, we find that majority of people in the room won’t be able to tell us what’s in their super fund; they don’t really have a genuine idea, that’s not something they look at regularly,” Ms Fitzsimons said.
“We have employees in their 20s who are looking at a 50 or 60, possibly a 70-year working career. Superannuation’s not something they’re going to focus on, but at the moment is one of the main vehicles that they can use if house ownership’s not going to be an option for them. So, these are the sorts of areas, as employers, we can help give our staff the time to think about that and that framework.”
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