A recent survey of 2,000 people carried out by Nationwide, found that although 79% of participants knew what abbreviations such as OMG and LOL mean, only half correctly guessed the meanings behind financial terms such as APR and PAYE.
A lack of basic knowledge and understanding of these terms can be a major contributor to the detriment of an individual’s financial wellbeing. Not realising what APR means, for example, leads some people to use payday loan companies, further increasing their debt.
So employers should also be concerned with their employees financial wellbeing. 70% of those surveyed said they think about their financial concerns during working hours and one-third admit that such worries prevent them from achieving their best in their jobs.
People in their team could well be taking time off to deal with financial issues and many could well benefit from some help with de-mystifying financial planning and decision-making.
If a company implements financial wellbeing initiatives, the first benefit is that staff feel they are being cared for and that the company is addressing their concerns. This can help boost productivity and company loyalty. People’s financial wellbeing generally fluctuates – for example, they may start earning more mid-career but have larger outgoings such as mortgages and costs associated with having children. Then, once they’ve paid off the mortgage and the children have left home, they may be more ‘comfortable’ again. The purpose of financial education and wellbeing initiatives is to smooth this journey for employees. Finding out how much – or how little – they know about the basics can help you frame a useful response.
Financial wellbeing is no longer just the domain of the individual – companies and employers can do a lot to help and in the process, enhance their reputation as an excellent organisation to work for.
If you need any help or advice on PAYE then please do not hesitate to contact me, Ian Davies