Feeling secure and having the knowledge to know how to manage your financial wellbeing is important for people to feel confident in their finances. Without this confidence or knowledge, people experience the negative impact that having poor financial wellbeing can have on their lives. The Covid-19 pandemic has only further aggravated this stress. I talk to Morrinson Wealth Wellbeing, a specialist Financial Wellbeing provider, about how financial wellbeing has been affected by the pandemic, the connection between financial wellbeing and diversity/inclusion, and how looking after our financial wellbeing can help maintain our mental health.
Can you briefly remind us what financial wellbeing is?
My go-to definition is taken from the CABA: Financial wellbeing is about a sense of security and feeling as though you have enough money to meet your needs. It is about being in control of your day-to-day finances and having the My go-to definition is taken from the CABA: Financial wellbeing is about a sense of security and feeling as though you have enough money to meet your needs. It is about being in control of your day-to-day finances and having the financial freedom to make choices that allow you to enjoy life. Essentially, what this means is that you have a financial plan in place which improves your sense of security while increasing your financial peace of mind – ensuring you can capably weather any shocks that may come your way.
Can you tell us more about Morrinson Wellbeing’s history and the type of clients you work with?
The idea for Morrinson Wealth Wellbeing came first came about when we realised, just how regularly we were seeing the negative impact poor financial wellbeing had on our clients. People had time, confidence or knowledge limitations which meant they lacked essential financial skills; often the most basic concepts and principles were missing from their financial vocabulary. Coming from a financial services background where the innate benefits of having detailed financial knowledge were clear, the ideal place to start an education programme seemed to be the workplace – A trusted space which could provide education as an employee benefit while also reducing business risk/costs at the same time. Today, we partner with businesses across the UK who are focused on prioritising financial wellbeing and keen to shine a spotlight on the topic. Some are just embarking on their financial wellbeing journey; others are looking to expand or complement wellbeing offerings already in place – Most are consciously embarking on creating a more inclusive, supportive, positive money culture.
How do you think the pandemic has affected the financial wellbeing of various communities?
Unfortunately, the pandemic has intensified the financial inequalities that were already prevalent pre Covid-19; groups vulnerable to poor health are likely to be hit hardest, with the economic repercussions of the crisis falling disproportionately on young workers, people on unsecure employment contracts, low-income families, and women. At the beginning of 2020, the government-backed Money and Pensions Service announced a national campaign to ‘transform the countries financial wellbeing in a decade’. Using their own figures, a UK strategy was needed because 5.3 million children were not getting a meaningful financial education and 11.5 million people had less than £100 in savings to fall back on. Remember: these figures were released in January 2020 pre Covid_19 and its subsequent further impact on employment, education, and household income.
You’ve expressed interest in the topic of the connection between financial wellbeing and diversity/inclusion. What specifically have you found to be the case?
Financial behaviours can be driven by family values and culture, alongside social and economic factors, which impact how people engage with money. The topic of financial wellbeing is often viewed as one which is only important to those experiencing difficult financial circumstances, those in debt or earning a low wage, however, research regularly shows this is not the case; financial worries and pressures can impact anyone regardless of how much they earn or have in their bank account – It is not the amount you get paid, but what you do with it that determines your financial wellbeing. The purpose of D&I goals are to elevate all employees an equal level of opportunity to allow them to thrive at work. If the topic of financial wellbeing is ignored, you are essentially discounting the gender pay gap, employees from non-traditional family units lacking inherited wealth, and even the needs of your lower-income (often younger) employees who are the cornerstone of your organisation. Social and upward mobility are often words banded around within the D&I agenda, but by dismissing the intersection with financial wellbeing, businesses run the risk of missing the mark on responsible business targets and in turn these key areas.
In your opinion, what could the world of business do to ensure financial wellbeing in the name of diversity?
To retain, engage and empower employees, businesses need to ensure their benefits package and employee value proposition is not only relevant/personalised to their workforce’s needs and priorities, but genuinely improves their financial circumstances and reinforces they are valued. A good financial wellbeing strategy goes beyond token gestures and one-off initiatives, instead looking at the bigger picture. Financial wellbeing pervades many areas, such as liveable wages, secure & fair employment and benefits which increase income and earning potential. Considering the differing needs of diverse demographics and how they are impacted (both negatively and positively) by internal policies is the best way to ensure an inclusive and valued culture.
Are there any patterns of financial wellbeing among employees?
Firstly, everyone is different (if you can call that a pattern!) Each employee has different financial goals and aspirations. Second, the money ‘taboo’ is still prevalent – Especially in the UK, we shy away from money conversations with our friends, colleagues and in some cases even our family. As a country, we are statistically more likely to tell a stranger how many sexual partners we have had, whether we have had an affair, and whether we have ever contracted a sexually transmitted disease than to talk about our income! Lastly and most unfortunately, people categorised as financially vulnerable often do not view themselves as being so, as highlighted by recent FCA research.
Can you give some tips for people within this community, on how to be more financially stable? I often like to use the educational approach of ‘assess, plan, do, review’:
Assess – Assess your current situation, know your starting point, and honestly own negative behaviours. Sometimes having a trusted person to support here is helpful, for an objective viewpoint and accountability.
Plan – Plan out your future liabilities, account for worst-case scenarios with insurance and explore what your goals and aspirations for the future are. Develop your action plan!
Do – Do be kind to yourself, take small steps, follow your plan but do not be too hard on yourself if things change. Ask for guidance if needed and remember: the best-laid plans of mice and men often go awry.
Review – Circumstances change (always), review and adjust your plans through your lifetime. When times are good invest more, when times are tough try to stay afloat while still making sensible decisions.
How can financial wellbeing help us to maintain mental health?
When you feel financially secure and stable then you are ready to face financial shocks squarely in the face when they come along. No-one is immune and everyone at some point in their lives will experience them. Stress, sleep, and anxiety can all be reduced when you are safe in the knowledge that you have accounted for the unexpected, you have an emergency fund, protection insurance and ultimately a plan.