Why firms need to embrace ‘finpowerment’ to tackle financial wellbeing

As pressures on employees and their households continue due to the cost of living, workers in the UK have shared that they want more financial education resources from their organisation.

Financial education that strengthens the employer-employee connection, which has been dubbed ‘finpowerment’, has been described as a wellbeing benefit employees want to help boost their connection to their roles.

Nudge Global’s Can we connect report identified that money greatly impacts personal happiness and mental wellbeing, as more than two-thirds of workers currently feel ashamed, angry and depressed about their finances.

Four out of 10 revealed that they live paycheck to paycheck, while 76% feel anxious about their current financial situation.

Unsurprisingly, the challenges of the cost of living has exasperated these fears as the Bank of England recently predicted inflation will rise further this year to 10%.

Despite these concerns, 66% of those surveyed shared that having diverse benefits such as financial education support helps to build commitment to their employer.

But one third admitted that they don’t understand how their company-offered financial perks work.

Commenting on the findings, Jeremy Beament, co-founder and director of Nudge Global, said: “The employer/employee relationship can be a stabilising element in an unstable world.

“Companies can strengthen the connection by providing tools and resources to help employees achieve their financial goals. Finpowerment – the way employers can empower their people to feel confident and in control of their money through financial education – significantly contributes to overall wellbeing.”

Pessimistic feelings

The report also looked at the state of the country when it comes to financial worries, as 81% of workers feel pessimistic about the UK’s financial future.

Due to the unpredictability of the last two years, 35% now have decreased trust in financial institutions.

There are also lasting impacts of the pandemic, as 41% of workers shared that it has made them uncertain about how best to plan financially for the future.

This has given rise to over a third who stated that they want their employers to provide information on how to grow their retirement funds.

For example, currently only a few are focussing on alternative saving options such as lifetime ISAs (21%), stocks (15%) or mutual funds (eight percent).

With this in mind, financial education support can help to strengthen the employer-employee bond, as 43% of staff members are most interested in financial education that helps them grow a savings account, while 30% want help with reducing debt.

How to support employees’ financial wellbeing will be explored during Global Payroll Question Time this June – get your free virtual ticket here.