What is financial well-being and how can employers help?

By Indeed Editorial Team

Published 11 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Working is a way to pay the bills and make enough money to live comfortably. But for some people, money is a significant source of concern. People with financial problems are more likely to feel stressed and to take time off work. In this article, we discuss the subject of financial well-being, how an employee's money problems can impact a business and the 14 steps employers can take to lessen employees' financial concerns.

Related: Why work for companies with benefits? (With 18 examples)

What is financial well-being?

Financial well-being means feeling financially secure. It's about having enough money for your current needs and for the future. It means knowing that you are making enough money for your living expenses and that you can put some cash aside to cover unexpected events, such as possible redundancy or suffering an illness or accident. It also means being able to save for a healthy retirement.

People who are financially secure are less worried about money, which leads to better physical and mental health. This has benefits for their relationships with other people too, especially with the people they live with. Feeling as if you have enough money to cover everyday expenses and to save for treats and holidays generally leads to a sense of feeling better off all around.

Related: What's well-being in the workplace? (Definition and factors)

Why is financial well-being important?

Having enough money to live on allows employees to live a full life and pursue their interests and passions. When employees can't make their money stretch to cover their everyday expenses, they may feel stressed and become physically unwell. There is no specific figure in a bank account that someone requires to feel financially well. It is more about an individual's personal financial resilience. Many people live on low incomes but develop ways to make their money last. Others have high incomes along with large debts, which makes them feel financially insecure.

Rising living costs and increasing inflation have revealed the financial strains that many employees find themselves in. The Money and Pensions Service found that before the pandemic, 11.5 million people had savings of less than £100 in their bank accounts and nine million people were borrowing money to pay for food and everyday living expenses. This situation is likely to worsen as costs rise.

Related: Ideas for employee well-being programmes you can explore

How can financial security impact employers?

According to the Money and Mental Health Policy Institute, two-thirds of employees with money worries have at least one sign of mental health that may affect their ability to do their job. This may include a lack of sleep, inability to concentrate properly and lack of motivation. An employee's financial situation can affect an organisation or company in these ways:


Employees who feel financially secure are less likely to be absent or call in sick. People who feel well-off financially are often more productive in their roles. Employees worried about money may sleep less, find it difficult to concentrate at work, suffer from poor health and consequentially, take more time off.


If customers don't pay their bills, this has a large impact on a company's cash flow. The company may lose money and be forced to write off a debt. In contrast, well-off people financially spend more and use more services and goods.


If employees feel badly treated, this can impact an organisation's reputation. For example, key workers who feel they are not being paid fairly may publicise this. Employers who can demonstrate that they take the financial concerns of their employees seriously can help their public image.

Related: 11 stress management apps to minimise stress at work

14 steps to improving financial security for employees

Employers can introduce resources for employees to build better financial resilience in the following ways:

1. Publicise free advice

The first step is to open up a communication channel to let employees know they can access free and confidential advice. There are various organisations that provide information about money and how to manage debt. The government provides resources through the Money and Pensions Service.

Related: What do financial advisors do? (Plus how to become one)

2. Boost savings access

A key reason for poor financial resilience is not having adequate savings put aside for unexpected circumstances. One way to manage this is to partner with organisations providing savings schemes, such as payroll savings. These schemes can help employees to get into the habit of saving regularly.

3. Provide payroll loan systems

Financial problems can worsen when people cannot find affordable loans. If employees can only borrow from expensive credit systems, they may get into even more debt. Payroll loans can help employees borrow the money they require for work expenses at reasonable rates of interest. Employees may use them, for example, to buy a rail season ticket.

4. Offer money management tools

If someone struggles to manage their money, they may benefit from apps and tools that help them budget. Employees whose income varies monthly may find it easier to manage their cash flow with these online tools. Employers may consider providing access to these as a staff benefit.

5. Invest in managerial support

Money problems can lead to low self-esteem. One way to confront low employee morale is for managers to boost their knowledge of financial concerns and the types of issues it can lead to. Employers may consider investing in resources that help managers to learn about the causes of poor financial management and how to support staff that face difficulties.

6. Consider work event costs

Employees can face financial costs while working, such as paying for meals out with colleagues. Employers may consider paying for the costs of attending work events, such as paying for the food and drinks at a Christmas party. Ensure that if an employee has money problems, it doesn't mean they cannot attend team-building and social events at work.

7. Provide free uniforms

Employers are obliged to provide personal protective equipment (PPE) for free, but they are not legally bound to pay for other types of uniforms. In many cases, employers give staff two or three sets for free and then ask for employees to pay a contribution towards extra uniforms. To avoid asking employees to use their own wages for business expenses, it's a good idea to provide all uniforms for free.

8. Provide debt advice

Not all people who face financial difficulties ask for help, yet debt advice can be very useful. Employees may consider placing information about how to ask for help around the workplace. If an employee has taken long-term sick leave or has reduced their working hours for any reason, it's worth asking them if they require advice, including information about potential benefits and welfare support.

9. Consider the impact of paid sick leave

When people feel low, they're more likely to require time off work. Paid sick leave is essential to allow the time and space to recover fully. Suppose an employee is worried about losing income. In that case, if an employer moves them onto statutory sick pay, this can lead to job insecurity and, in the longer term, possibly more absence. It may be an idea to look at income protection as a group policy to lower the stress on someone's finances following time out of the workplace.

10. Look at employee discount schemes

Perhaps there are local businesses that provide discount schemes for employers. This may include gyms, restaurants or other leisure activities. You can approach local companies individually, or sign up for a national scheme that offers employee benefits.

11. Consider an employee life insurance policy

It may be possible to source a low-cost life insurance policy that employees pay for monthly. This is a contract that covers a group of people and can cost less than individual life insurance. It provides a tax-free payment to an employee's specified dependents if the employee tragically dies while working for the company.

12. Offer a cycle-to-work scheme

A cycle-to-work scheme gives employees the chance to buy a bicycle using a salary advance. You may provide the loan interest-free. Or you may purchase a fleet of bikes available to employees to borrow for their daily commute.

13. Provide work health insurance and income protection schemes

Providing an employee health insurance policy provides employees with medical benefits. They may use it for themselves or their loved ones. Similarly, a group income protection plan covers their income if they cannot work because of an injury or illness.

14. Create a financial health programme

Employers may consider creating a financial programme which may include:

  • Financial training: Offering workshops or online training with ideas for improving financial judgements and developing healthy spending habits.

  • Debt advice: Providing counselling for those in debt, plus suggestions for charities and other organisations that can help family members.

  • Employer Salary Access Scheme (ESAS): This gives employers access to 'instant pay' at the time they earn their wages. Many hourly paid employees prefer to be paid weekly or fortnightly since this can make it easier to budget.

Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed.

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