A new survey found 23m adults have low levels of financial literacy with only one in five able to answer three basic questions on savings and investment.
In a report of 3,000 adults undertaken by Opinium for Abrdn, the investment group, there was a level of ignorance or confusion that would make it difficult for people to take even the most simple decisions about managing their money.
The research found that more than half (59%) of employers consider poor financial literacy as a major workplace financial wellbeing risk.
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.
Jonathan Watts-Lay, Director, WEALTH at work comments:
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.
Jonathan Watts-Lay, Director, WEALTH at work
Tips to help employees improve financial literacy
- Empower employees with knowledge –Whilst some information may be provided via a website or leaflet, actually attending an interactive financial education workshop about the financial issues that relate to them is far more engaging. This is why increasing numbers of employers are using either virtual or face-to-face seminars. One-to-one financial guidance or coaching sessions are also becoming a more popular form of support and is particularly useful for those who need a deeper level of knowledge. These could be delivered via a video call or via the telephone and can really help people understand what their next steps should be and help them decide if they would like further support such as investment advice.
- Offer a range of support –As everyone has different financial needs and priorities, support should be tailored to cover all life stages and a mix of needs such as debt management, building up an emergency fund and saving for a first home, as well as retirement.Also, whether companies have staff that are office based, in the field, on a production line, working shifts, or even overseas, financial wellbeing support must also be accessible to all to optimise buy-in and boost employee engagement. Offering a range of delivery methods for financial wellbeing support can also ensure the majority of employees are always supported. This could include classroom based financial education sessions, interactive online seminars, or even webcasts and digital tools that can be used anywhere, on any device.
- Bring in a provider –An increasing number of employers are now turning to specialist workplace financial wellbeing service providers to help individuals build their financial knowledge and improve their financial wellbeing throughout their career. Taking an active approach and supporting employees to improve their financial literacy with the help of reputable firms, which in turn will lead to a more financially resilient workforce, is a win win for all!
Joanne is the editor for Workplace Wellbeing Professional and has a keen interest in promoting the safety and wellbeing of the global workforce. After earning a bachelor's degree in English literature and media studies, she taught English in China and Vietnam for two years. Before joining Work Well Pro, Joanne worked as a marketing coordinator for luxury property, where her responsibilities included blog writing, photography, and video creation.
