Context

Measuring financial wellness in the workplace has become more of a priority, but it had been difficult to determine initial levels of staff wellbeing, as well as the impact of interventions. The study set out to address these issues.

The study

The study surveyed 10,053 UK employees across 25 public and private sectors to inform the development of a quantitative analytical model. The report findings focus on a financial fitness score based on ten questions. The score may be 1 (not in control, in or at risk of high-interest debt), 2 (no freedom to enjoy), 3 (limited coping, less than a month’s income in savings), 4 (plan in place, with at least two months’ income in savings), or 5 (financial freedom). The findings enabled Salary Finance to develop a Financial Fitness Improvement Toolkit to help employers implement, monitor and improve financial wellbeing.

Key findings

• The study notes that 10 questions can reliably determine an overall financial fitness score. 82% of those who score 1 reported worries, while only 8% of those scoring 5 did.
• 40% of UK employees had money worries. They were 8.8 times more likely to report sleep disturbance, 7.6 times more to not finish daily tasks, 5.7 times more to be have difficult relationships with colleagues and 2.2 times more likely to be looking for another job than those without money worries.
• They are also 4.9 times to be depressed and 3.8 times more likely to be prone to panic attacks than those without. Analysis of other data suggests that this cuts GDP by 1.9 to 2.4%, or 13-17% of salary cost.
• Those with lower annual income (£10-15k) and those with the highest (over £100k) were more likely to report financial worries. 49% of both groups were worried.
• Those with lower levels of literacy were more likely to view finances and scary and had few trusted sources, although there may be a role for employers to play with 77% employees trusting them to deal with their financial affairs discreetly.
• More (43%) women than men (36%) worried about their finances. Social and demographic factors area a major determinant of the overall score, so it is generally not meaningful to compare scores across sectors.
• Higher scores were correlated with fewer borrowing sources, fear reasons not to save and greater confidence in how savings products worked. Relationships appear more varied by score in the case of barriers to financial literacy and sources of financial support.
• 44% of respondents feel that their employers care about their wellbeing, and 77% trust them to deal with their financial affairs discreetly.
• Those who scored 1 were most interested in low-cost loans; those scoring 2 and above prioritised pensions advice.

Points to consider

• There is little information about sample sizes or confidence intervals.
• There is no information about the timings of the survey, its mode or sample source.
• It is not clear at what point the five-point scale was derived and applied or what the ten questions are.

• This may be relevant for employers looking to implement and monitor programmes that aim to improve financial wellbeing

• As described, seems to offer an effective and simple approach for employers.

• No apparent indication of how to find out more or use the approach.