There have long been concerns about financial capability in the UK and calls for education to help people manage their finances. But should this be provided in the workplace?
Clearly there is a demand for this. An Open University survey, published in December 2015, found that 81% of employees would like financial education to be offered in the workplace while only 7% were actually receiving any.
There are some clear incentives for employers to take the initiative in the provision of financial education for their staff. Research has linked poor performance at work to employees being stressed about their finances. PWC’s survey, Financial stress and the bottom line, published in August 2021, found that 47% of those employees with financial worries either missed work on occasions or had an adverse effect on their productivity. A further survey by Close Brothers, Financial wellbeing index, published in January 2019, found that money worries affect more than three-quarters of employees while they are at work.
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Financial education can also reduce the risk of employee crime. A frequent factor in theft from employers is indebtedness and despair about finding a way out. Financial education can help fix such problems.
There is also the matter of transferable skills: the knowledge learnt through financial education can help staff with the numerical aspects of their daily work.
Offering financial education can build on the existing personal financial relationship businesses have with staff; particularly as a result of the successful roll-out of workplace auto-enrolment into pension schemes. Some employers are already extending this relationship by offering workplace savings accounts, known as ‘sidecars’, to help employees deal with unexpected bills. These savings, which are automatically deducted from pay, reduce the need to build up high-cost debts to cover such bills.
Martin Upton is director of the True Potential Centre for the Public Understanding of Finance at the Open University