More than half (59%) of employers consider poor financial literacy as a major workplace financial wellbeing risk, according to research[1]. A further 47% of organisations cite financial literacy as a challenge for improving financial wellbeing for the majority of the workforce.
Jonathan Watts-Lay, Director, WEALTH at work comments;
“Unfortunately, it’s well known that when individuals do not fully understand their finances and how to address current difficulties and mitigate potential risks, it can result in stress. In turn, this can lead to lower employee productivity and is a major workplace risk.”
A study by the Centre for Economics and Business Research, reveals that 10% of full-time and part-time employees missed work because of financial worries, while 18% acknowledged reduced productivity.[2]
Watts-Lay continues; “Not only this, but a lack of understanding of their finances and financial management could result in employees making poor decisions which can prove very costly, especially at retirement when people are faced with complex decisions about what to do with their retirement savings.
Helping employees to understand the key financial issues that relate to them is an effective way of overcoming the risks of poor financial literacy. This is because when employees feel in control of their finances, their overall wellbeing is greatly improved. A commitment is therefore needed by employers to provide workplace financial wellbeing support including education and guidance to help employees avoid some of the financial challenges they find themselves tackling at different stages of their lives.”
He adds; “This means offering financial education programmes that help employees with a full range of money matters throughout their career including ways to manage a budget, save money, manage debt, boost savings and prepare for retirement.