How Covid has affected our financial behaviour: The changing landscape of financial behaviour
When it comes to financial wellbeing, Covid has created a stark divide between those who have coped well (and even reaped from the pandemic with finances positively impacted) and those who have found themselves in severe financial difficulty.
Findings from LCP’s survey of 10,000 employees carried out in Autumn 2020, shows that Covid has impacted on different demographics, and outlines what employers should be considering to better manage wellbeing within their organisations and respond to changing employee concerns
On average, one in four employees (25 per cent) reported feeling concerned and negative about their finances, and that they have been unable to cope in the last couple of days before pay day.
Financial worries and mental health
The survey also highlights how financial worries and mental health issues are impacting the younger cohorts in the workplace more. Those in the young and mid-career age bracket (16-34) were more likely to feel that financial concerns affect their behaviour at work and ability to do their job (49%). Around 30% in this age bracket said they were unhappy with their career and personal development and nearly 36% said they were unhappy with their mental health.
Additional analysis shows that more than six million employees are on the other side of the coin and have found it easier to save during the pandemic.
Based on Bank of England estimates of increased savings, just over the period March-November 2020, these six million employees are likely to have improved their net wealth by thousands of pounds, through a combination of reduced spending, reduced indebtedness and increased savings.
Heidi Allan, Financial Wellbeing Senior Consultant at LCP, said
“Our findings highlight the enormous toll that the pandemic has taken on mental, physical and financial wellbeing. With the economic impacts of Covid-19 still yet to fully play out, it’s clear that the ‘anxiety peak’ has yet to be reached. While businesses have a lot on their agenda as they try and stay resilient in the face of financial pressures, there is a clear link between worry, uncertainty, poor performance, absence and sickness levels at work amongst employees which has a direct impact on bottom-line costs.
Understanding and listening to employees, the concerns they have, and what help they need is the first step that businesses should take to develop an effective programme around financial education and wellbeing. Ultimately, this will make a real difference to their employees’ lives as well as saving money and keeping the workforce engaged.”
Promoting financial wellbeing and inclusion
Elva boasts a suite of technology products that aim to promote financial wellbeing and inclusion. These include a salary advance tool where employers can give their employees an advance on their monthly salary to cover unexpected costs, for example, or to help new employees who need to pay the bills and travel expenses ahead of their monthly pay date.
How Covid has affected our financial behaviour: Our service is underpinned by financial education and advice, including nudges for better money management.
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