People with mental health problems are nearly three and a half times more likely to have problem debt.1
Financial stressors on employees are at an all-time high.
Employers will be concerned about the performance of their company during an adverse economic climate. They’ll be worried about increased costs through inflation. And at the front of mind for every business leader must be how these financial stressors are also affecting the ability of their employees to do their best at their job, alongside the increased risk to their employee’s health.
There is an established association between financial security and mental health. Even a slight decline in mental health (long before an individual would meet the criteria for a diagnosable mental illness) can be linked to increased financial stress. And people who are under financial stress are more likely to report poor overall health, including anxiety and depression, and insomnia.
The cost of living crisis in the UK could exacerbate people’s existing financial concerns or create new ones. People with mental health problems are nearly three and a half times more likely to have problem debt¹. And 86 per cent of people with mental health issues and debt say that their debt makes their mental health issues worse¹. It can be a spiral that’s difficult to break free from without appropriate support.
The charity and mental health group, Mind, has shared the following common ways mental health can affect the way individuals deal with money:
- If feeling low or depressed, they may lack motivation to manage their finances. It might not feel worth trying.
- Spending may provide a brief high, so they might overspend to feel better.
- They might make impulsive financial decisions when they’re experiencing mania or hypomania.
- They might avoid doing things to stay on top of their money, like opening bills or checking their bank account. They might try to avoid thinking about money completely.
Further to this there’s a fair amount of stigma surrounding debt and other financial issues, so it’s common for those with money troubles to experience a sense of humiliation, shame, and low self-esteem. This in itself can have mental and emotional consequences. And a further concern is individuals struggling with financial stress often develop unhealthy coping mechanisms to escape their reality.
The role of employee support and benefits at a time of financial instability could prove crucial. Understanding how financial stress affects mental health, and vice versa can help individuals develop healthier coping mechanisms to improve their situation and stop some of these negative cycles.
How can businesses support their people?
The AXA Health and REBA Employee Wellbeing Report 2022 highlighted a disparity between mental wellbeing and financial wellbeing strategy maturity. It’s important organisations don’t view mental health and financial health as independent, and therefore consider comprehensive approaches that create workplaces where people can flourish and reach their potential.
CIPD, Mental Health at Work and the Bank Workers Charity offer useful recommendations with regard to financial and mental health workplace action plans. Some of the most valuable recommendations include:
- Mental health training for line managers – helping managers to spot the signs of when something might be going wrong or creating environments to talk about their team's problems in a non-judgemental setting.
- Normalise conversations about money worries at work; showing concern and empathy can help to break down any stigma.
- Offering roles flexibly wherever possible can help new and existing employees to work in ways suited to their needs. It means they might have time to access external help, such as visiting a financial advisor.
- Signpost to free, confidential and independent money and debt advice from the government’s Money and Pensions Service.
- Education and awareness - making sure their workforce is fully aware of all the benefits they currently offer and how to make the most of them. Many employers offer employee assistance programs that provide confidential counselling and support for employees dealing with financial stress. If employees were more aware that they have access to personalised financial advice, they might take advantage of that.
- Expert support from professionals such as well promoted effective Employee Assistance Programmes.
Presenteeism and absenteeism will reliably increase as a result of financial and mental health pressures, so it’s important for organisations to have the means to detect this as quickly as possible and offer employees a solution without delay. Access to mental health services through a digital platform makes barriers for employees easier to overcome. They can access it discretely, and remotely. It can help identify problems early and signpost to the right resources and services including counselling.
Helping your employees get the support they need
If counselling is offered it is essential for organisations to be flexible and enable employees the time, space and privacy to be able to attend their sessions, even during working hours. Nobody thinks anything of taking time off to see the dentist or the GP, this should be the same. In this case, the employee might not need the whole morning or afternoon, as they can have their session remotely from work. This is only true provided the employer is offering the resources to do this, such as the time to do it and a private place to do it from.
Wellbeing apps are an effective way to support employees as and when they need support, with the flexibility to do it in a space that suits them. They can assist in identifying triggers, resilience building, screening for a wide range of stressors and other risk factors and can provide employers with information about their workforce’s mental health, enabling them to measure the impact of their interventions.
In conclusion, I believe that addressing financial stress and its impact on mental health is crucial for the wellbeing of employees and the success of business. By implementing a comprehensive financial wellness program, providing targeted support to those employees who are struggling the most, and offering access to mental health services, we can improve the financial wellbeing of employees and reduce the impact of financial stress on their mental health.
¹Money and Mental Health Institute, 2019