In The Employer’s Guide to Financial Wellbeing we explored the link between employee financial literacy and wellbeing. We looked at how levels of financial literacy vary depending on an individual’s Financial Fitness Score and the barriers that stop people from learning more about their finances.
Financial Literacy = Financial Wellness
We asked respondents whether or not they understood a number of financial terms.
Those with lower scores understood far fewer financial concepts on average. Their understanding was especially low on longer-term, protective behaviours like long-term planning, mortgages, income protection and pensions.
Barriers to Financial Literacy
Similarly, attitudes toward the entire topic of financial matters were also related to an employee’s Financial Fitness Score.
Those with lower scores are much less likely to engage in finding out more about financial or money issues as they feel intimidated or not sure where to go for good advice. Those with a score of 1 or 2 had an average of 5 reasons why they were not taking steps to improve financial literacy vs 2.7 for those that scored 4.
The Opportunity for Employers
Those with low Financial Fitness Scores are less likely to find out more about financial issues – they either feel intimidated or are not sure where to go for advice. Money is, to them, a scary topic that they lack confidence in speaking about, and are too embarrassed to ask anyone for help with.
Our data shows that improvements in financial literacy are a key driver for increased financial wellbeing. More awareness and understanding leads to better decision-making and more positive habits.
By providing an organisational financial wellbeing framework to help them improve their Financial Fitness Score, employers can significantly limit stress, decrease absenteeism and improve retention rates.
You can find out more about The Employer’s Guide to Financial Wellbeing and download your copy at https://www.salaryfinance.com/financial-wellbeing-guide