Living costs are rising – help your employees build their financial resilience

cost of living rising financial resilience

As 2022’s news continues to be dominated by rising energy costs, increasing inflation and higher national insurance, we asked our coaches how employers could best support their people to become more financially resilient.

Break the money taboo – people want to talk about it

Money is still a taboo subject but, with the rising cost of living threatening to become a crisis for many, there really has never been a better time to start this conversation.

We know from our own research that 89% of people want someone they can talk to about money who will offer genuine, practical, and impartial advice.

Having senior managers discuss personal finance in team meetings, lunchtime sessions or webinars can help break down the taboos about money. Stories from leaders work well to engage and encourage teams to open up more. Or look to other sources like finance departments or from executives’ networks, to share stories or guidance.

If you want some inspiration on how to break the ice, try our Time to Talk toolkit to help open up money conversations.

Make education the priority

According to data from the World Bank, a third of the UK population are not financially literate, and our own research also reveals 95% of people worry about money. 

Employers should focus on providing financial advice and resources that are accessible, simple and available when their employees need them. 

One of the few times people will engage with their finances is when they look at their payslip each month. Increasingly these are being delivered in an electronic format. Employers could use them to alert staff to some of the changes affecting them, such as the national insurance increase or tax code changes. 

You could also provide links on your staff intranet to trusted independent financial advice sites, such as Money Saving Expert, Boring Money and the BBC, which provide handy explainers to what is happening in the world of finance that may affect them, such as increased mortgage interest rates.

Our financial coaches are a source of approachable advice in plain language that helps employees to health check their finances and puts them on the road to better managing their own money. 

Focus on what’s most important for financial health 

The two most important factors for financial resilience that our coaches start with are building up emergency savings and creating sustainable budgets. Employers should make sure their tools and resources address these two areas of financial health, as well as longer term goals such as pensions.

  1. Building emergency savings 

The Covid-19 pandemic and the cost-of-living increases have shown the necessity of having additional money in the bank to cover contingencies. 

But still, only 20% of employees we work with are actively looking to save for a rainy day – they typically have other priorities for their money, either a specific goal like buying a home, or they are focused on longer-term saving like pensions. 

Our coaches recommend employees have three months salary in emergency savings, aka, enough cash available to repair the boiler, buy a new car or cover yourself for a few months in case of a loss of income.

  1. Setting positive budgeting goals 

For many the word “budget” means “cut back”. But really, good budgeting stems from understanding what’s coming in, what needs to go out, and how much is available for discretionary spending. 

Being clear on where your money goes, will make it easier to see that the £100 being spent on takeaway coffee and TV subscriptions a month, could instead be spent to reduce worry about paying the electricity bill. Knowing what their budget is will help employees plan for the road ahead.

Employees can feel vulnerable and lost in the world of finance, so knowing they have someone they can talk to at work about money, whether it’s a manager, a colleague or a financial coach, is an important way in which employers can support them and make them feel valued. 

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