Firms support employee mental health damaged by money worries

Finan­cial well­be­ing and men­tal health are inex­tri­ca­bly linked: when one fal­ters, the oth­er is like­ly to fol­low. With the cost-of-liv­ing cri­sis and a reces­sion increas­ing­ly like­ly, there are grow­ing con­cerns of a poten­tial nation­wide men­tal-health epi­dem­ic.

A group of char­i­ty CEOs, which includes the chief exec­u­tives of men­tal health char­i­ty Mind and the Samar­i­tans, recent­ly drew atten­tion to this con­cern in a let­ter to the prime min­is­ter. They said that, despite sig­nif­i­cant atten­tion being drawn to the cost-of-liv­ing cri­sis and the like­li­hood of a reces­sion, “there has been no recog­ni­tion of the risk this pos­es to the nation’s men­tal health”.

They added: “We know from pre­vi­ous expe­ri­ence that a squeeze on liv­ing stan­dards, unman­age­able debt and eco­nom­ic reces­sions cause a rise in men­tal health prob­lems, demand for ser­vices and are, sad­ly, con­nect­ed to a rise in sui­cides. We have the oppor­tu­ni­ty to learn from the past and address how to sup­port people’s well­be­ing to avoid repeat­ing his­to­ry.” 

A sur­vey ear­li­er this year from the Mon­ey and Men­tal Health Pol­i­cy Insti­tute, which was found­ed by mon­ey-sav­ing expert Mar­tin Lewis, also shows the impact. It revealed that 59% of adults thought the cost-of-liv­ing cri­sis was hav­ing an adverse effect on their men­tal health, with one in five say­ing the pres­sure was so much they felt “unable to cope”.

But CEOs are aware of the eco­nom­ic chal­lenges that employ­ees face. Cook co-CEO Rosie Brown says: “Our start­ing point at the moment is a con­cern for our teams. Peo­ple are being real­ly bad­ly hit by what’s going on.” 

Sim­i­lar­ly, Ipsos UK boss Kel­ly Beaver described it as “the biggest thing on her mind”, adding that if the com­pa­ny didn’t take “seri­ous mea­sures between now and next year, our staff will real­ly strug­gle”. The research com­pa­ny has com­mit­ted to giv­ing staff three £100 vouch­ers for high-street stores to help them through the win­ter peri­od. 

Financial worries impact mental health

Unfor­tu­nate­ly, the actions of prime min­is­ter Liz Truss and chan­cel­lor Kwasi Kwarteng have only added to people’s con­cerns. Despite fea­tur­ing sev­er­al poli­cies to relieve finan­cial pres­sure on indi­vid­u­als, includ­ing the cap on the unit cost of ener­gy and scrap­ping the rise in nation­al insur­ance, the fis­cal event – nick­named a ’mini bud­get’ – caused a plunge in the val­ue of the pound and a sharp rise in the inter­est rates on gilts.

This result­ed in the Bank of Eng­land inter­ven­ing with a £65bn pledge to buy UK bonds and sta­bilise finan­cial mar­kets. But the mort­gage indus­try has been hit, with lenders with­draw­ing thou­sands of prod­ucts and the aver­age cost of a two-year mort­gage ris­ing above 6% for the first time in 14 years. 

The dif­fi­cul­ties of the UK econ­o­my are clear­ly affect­ing indi­vid­u­als. The ONS said that 89% of British adults report a rise in liv­ing expens­es. Sim­i­lar­ly, there were more search­es for the term ’sav­ings account’ on Google last month than at any oth­er point since 2004, as Britons looked for ways to save mon­ey.

Simon Boc­ca, founder and CEO of pay­rolling start-up Pay­Cap­tain, says: “Finan­cial anx­i­ety and men­tal health have an implic­it link. One of the main rea­sons for absence from work at the moment is stress, which is often caused by finan­cial anx­i­ety.”

He adds: “That has a direct knock-on effect on pro­duc­tiv­i­ty, absen­teeism and staff reten­tion. So that’s why it’s impor­tant that com­pa­nies take this seri­ous­ly and sup­port their employ­ees.”

Companies offering cost-of-living bonuses

One head­line-grab­bing solu­tion that com­pa­nies are offer­ing is a ’cost-of-liv­ing bonus’ or one-off pay­ment, to help employ­ees through the more expen­sive win­ter months.

Online bank Mon­zo is one of the lat­est to offer a £1,000 pay­ment for staff earn­ing less than £40,000 a year. In the announce­ment on LinkedIn, com­pa­ny CEO TS Anil says: “There is a strong link between finan­cial needs and men­tal health and, as a com­pa­ny, we’ve always cared deeply about men­tal health. We have a sup­port net­work in place, which includes men­tal health first-aiders, access to sup­port and insur­ance.”

Mon­zo is not alone in issu­ing one-off pay­ments to staff. Lloyds Bank, Vir­gin Mon­ey and Tay­lor Wim­pey are giv­ing thou­sands of their staff an addi­tion­al £1,000 in their pay pack­ets, while employ­ees at the Finan­cial Times will receive £1,800.

Com­ment­ing on the trend, co-founder of HR con­sul­tan­cy 10Eighty, Liz Sebag-Mon­te­fiore, says that while cost-of-liv­ing bonus­es can work at com­pa­nies that can afford them, these busi­ness­es should try to ensure they are dis­trib­uted fair­ly and ben­e­fit those who most need them.

She adds: “The thing about bonus­es is you have to be fair – if you don’t give a set cost-of-liv­ing bonus across the board, how are you going to choose who gets it? If you base it on salary and only pay low­er paid employ­ees, it’s not nec­es­sar­i­ly fair­er as you don’t know each individual’s exact finan­cial cir­cum­stances. It may be bet­ter just to pay such bonus­es, as you can afford, under your usu­al process­es.”

Strategies to support employee financial health

There is a recog­ni­tion that com­pa­nies con­sid­er­ing finan­cial ben­e­fits for staff should pri­ori­tise assis­tance for the low­est-paid employ­ees. A study from the ONS found that those with a gross per­son­al income of less than £10,000 per year had the high­est per­cent­age of peo­ple report­ing feel­ing very wor­ried (31%) about the cost-of-liv­ing cri­sis. In con­trast, only 12% of those with a gross per­son­al income of £50,000 or more felt very wor­ried about the cur­rent sit­u­a­tion.

Mon­ey and Men­tal Health Pol­i­cy Insti­tute chief exec­u­tive Helen Undy says there are many ways that busi­ness­es can sup­port their employ­ees’ finan­cial and men­tal health – the most obvi­ous of which is to ensure all staff are paid at least the liv­ing wage.

She also recog­nis­es, though, that sup­port­ing finan­cial well­be­ing goes beyond pay. “Busi­ness­es should rou­tine­ly sign­post help­ful ser­vices like debt advice and men­tal health sup­port, and ensure that man­agers have prac­ti­cal train­ing in men­tal health to sup­port staff who might be strug­gling.

”Employ­ers should also be tak­ing mea­sures to sup­port employ­ees with exist­ing men­tal health prob­lems, such as proac­tive­ly offer­ing work­place adjust­ments like flex­i­ble hours, to help peo­ple stay and thrive in the work­place.”

Hav­ing a sense of con­trol over our per­son­al finances is key to address­ing finan­cial anx­i­ety

Andrew Berrie, head of work­place well­be­ing at Mind, advis­es employ­ers to update and appro­pri­ate­ly resource their finan­cial well­be­ing poli­cies to help cre­ate an inclu­sive cul­ture sur­round­ing finan­cial well­be­ing.

“Exist­ing ben­e­fits offered to staff — includ­ing hard­ship loans, pay advances, advice ser­vices or finan­cial sup­port such as trav­el loans or cycle-to-work schemes — should be well-pro­mot­ed and easy to access,” he adds. “Hav­ing a sense of con­trol over our per­son­al finances is key to address­ing finan­cial anx­i­ety, so edu­ca­tion­al pro­grammes around bud­get­ing, pen­sions and plan­ning for retire­ment can be a great source of sup­port.”

In addi­tion, Sebag-Mon­te­fiore sug­gests com­pa­nies should draw atten­tion to their employ­ee assis­tance pro­gramme, if they have one, and ensure work­ers know how to access coun­selling, as required. It is also impor­tant to pro­vide a safe space where peo­ple feel com­fort­able dis­cussing their finan­cial or men­tal health prob­lems.

Ulti­mate­ly, the finan­cial chal­lenges the UK is fac­ing will impact most peo­ple, whether due to ris­ing mort­gage repay­ments, soar­ing ener­gy bills or food costs. Com­pa­nies are well-posi­tioned to give indi­vid­u­als peace of mind. And those that act ear­ly to sup­port their staff’s finan­cial trou­bles can avoid any poten­tial neg­a­tive impacts it may have on employ­ee men­tal well­be­ing.

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