How important are finances to an individual’s overall wellbeing?
Financial wellbeing is a critical part of an individual’s wellbeing. If people are anxious or stressed about money this is likely to have a detrimental impact on their mental and physical health. This is a significant problem in the workplace – a recent survey found 87 per cent of those with financial worries said it affects their work. The cost-of-living crisis has thrown this problem into sharp relief for many employers who are looking at ways they can support their employees whether it is with immediate day-to-day money concerns or longer-term planning, to help people feel more secure about their financial future.
Is financial wellbeing an issue that affects all employees?
It is an issue that can affect anyone, regardless of their income or seniority in the workplace. Financial wellbeing is not determined by how much money someone has in their current account at the end of the month, nor how much debt they might have. An individual might be on a good salary and paying all their bills on time, but still be lying awake at night worrying about money — whether it’s how much their mortgage might increase, or whether they will ever be able to afford to retire.
Financial wellbeing is more about an individual’s attitude to money than a figure in their bank balance or pension fund. These attitudes can be based on a whole range of factors, including their experience of handling money, their background and the level of their knowledge of finance.
How do external events impact financial wellbeing?
Financial wellbeing is not a constant – it can go up and down as people’s personal and financial circumstances change. This may be driven by various life events, such as moving house, starting a family or being made redundant. These can have a significant impact on day-to-day finances but can also shift longer-term thinking around financial goals. Ill-health, for example, might make some people re-appraise their retirement options, while having a baby might prompt people to want to save more.
How can employers support financial wellbeing?
Employers are increasingly looking to offer information and a range of support services and tools designed to help improve the financial wellbeing of their staff. But individuals’ needs vary hugely, so it is important that these services can be tailored to support these diverse needs: from help with bills and budgeting to retirement planning.
Employees are less likely to engage with wellbeing services if they are faced with a wall of information, most of which is not relevant to them, so it is important to personalise content where possible. Aviva has a number of segmentation tools that can help with this.
How can technology help deliver a successful financial wellbeing programme?
The MyWorkplace app is being further developed to feature a new wellbeing support tool which will use technology to deliver more personalised support. Through a series of short intuitive questions on how people feel about their finances, the new tool will help direct employees to key online content in a variety of formats, including video, audio and interactive tools, as well as standard educational reading materials, and where relevant will signpost internal or external support: be it Citizens Advice or links to comprehensive financial advice which Aviva can also provide through our partners Succession Wealth.
The new financial welllbeing tool will offer employees an action plan, a series of tangible bitesize steps they can take — education, guidance, advice or coaching services — that can address their current financial needs and help reduce stress and anxiety around money issues. An important part of this is ensuring people don’t feel alone. Simply providing reassurance that others are in the same situation and have concerns about these issues can be hugely helpful and make a significant difference.
In future we envisage artificial intelligence being used to deliver a truly personalised service.
Dawn Anderson head of workplace proposition, Aviva
If people are worried about their day-today finances, they are unlikely to be able to prioritise saving or planning for the future. But we also know a lot of people are anxious about their future finances. A recent Aviva survey found 65 per cent of people want a retirement income that will last a lifetime, but only 42 per cent thought they would be able to achieve this. Similarly, 63 per cent want a comfortable standard of living in retirement – but only 53 per cent were confident they were on track to do this.
This shortfall shows just how many people are anxious about their longer-term finances. By prioritising financial wellbeing in the workplace we can start to give people the information and the tools they need to tackle these concerns and build a more secure financial future.