Why should employers make financial wellbeing a priority?

It’s no secret that COVID-19 has impacted our lives considerably, resulting in increased pressure and stress on people who are facing challenges related to the pandemic. Therefore, ensuring that you’re investing in your employees’ health and wellbeing is more important than ever before, and financial planning can play a large part in this.

A study conducted by St James’ Place Wealth Management has revealed that around 74% of Brits said they were so stressed about money at least once over the last year and they felt overwhelmed and unable to cope.

If you’re an employer, you play a key role in helping your employees plan financially for the future. As the winner of the ‘Best Approach to Day-to-Day Financial Wellbeing’ at the REBA Employee Wellbeing Awards 2020, this is something Gattaca is already acting on, and can speak first hand of the benefits of doing so for our employees’ financial wellbeing.

To help our clients, and indeed anyone, explore this further, we teamed up with Alison Dart and Ian Riggs of Eight Wealth Management, the financial planning experts, to bring you some useful tips on how you can make your employees’ financial fitness a priority.

How this can help your business

With 3 out of 4 employees stating that money problems are impacting their productivity at work (study: St James’ Place), it’s clear that the current climate is affecting people considerably. Therefore, by helping your employees to maintain financial stability and plan for the future – including any curveballs life may throw at them – you’ll have a happier, more productive workforce. As the saying goes, you only get out what you put in.

Although the pandemic has a lot to answer for, financial planning shouldn’t end with this crisis. It’s important that, as an employer, you continue to invest in your employees’ financial wellbeing, or you may find that they will look to your competitors for employment as a means of obtaining a pay rise.

And it’s not just retention you need to think about. In fact, companies with a greater focus on employee support mechanisms typically become a magnet for new talent.

What should businesses be doing?

Ian and Alison from Eight Wealth Management stress the importance of putting wellbeing at the heart of your organisation. From a financial perspective, this includes encouraging staff to think about their plans for the future and, of course, putting in place financial support mechanisms for saving money and protecting assets, through the company compensation & benefits package.

But even if the company is not able to invest in attractive benefits packages, there is much to be said for providing financial education to staff. There are many government sponsored schemes, offered for free, that can help your staff put in place better protection for the twists and turns of life. Sometimes, people just need to learn about these options so they can put in place measures to improve their financial wellbeing.

To help educate businesses and their staff, Eight Wealth Management is offering tailored education sessions for any employer, free of charge. These can be provided online, or face to face (when it is safe to do so), so if you are interested in taking them up on this offer, please get in contact with Eight Wealth Management today. Or, click here to view the full webinar and hear more about how Eight Wealth Management can help you and your employees.

What about my own financial wellbeing?

If you’re looking for advice on your own financial planning, here are the top tips from Eight Wealth Management:

Expect the unexpected and get protected

It’s vital that you decide what goals are important to you before you can plan your journey towards them. Without knowing this, you won’t be able to figure out the path to get there. And if you haven’t got a plan, you’re not on your own. 50% of our webinar attendees said they didn’t have any kind of financial plan in place.

However, it’s also important that you have protection in place for any roadblocks you may encounter along the way (e.g. illness or injury). Only 30% of our attendees were sure they had protection in place should they be unable to work, with the remainder either stating ‘no’ or ‘I don’t know’.

To get a plan in place that caters for all of the challenges life may throw at you is easier said than done, so it may be worth getting some professional advice to help you get set up for the future.

Make a Will

A Will ensures that, with ease, your children will be cared for and looked after by the people (or person) you choose and that your assets are passed to those who you really want to benefit.

What happens if I don’t have a Will?

  • If you have children, they will go into care and social services would decide who should become their guardians.
  • You would lose control over who benefits from your estate.
  • It can cause stress and anxiety for your loved ones.

So it goes without saying that having a Will and keeping it up to date is extremely important, not only for your own financial wellbeing, but for that of your loved ones. But despite this, 80% of our webinar audience said their Will was not up to date.

If you’re in the same boat, it’s worth thinking about how taking the time to update your Will now could help you feel in control of your financial situation. And whilst you could do it yourself, many feel this is the sort of task they would want some support and guidance with from professionals.

Obtain a power of attorney

This document empowers somebody to look after and manage your financial affairs and make decisions on your behalf if you are incapable of making them yourself due to accident or illness.

What happens if I don’t have a power of attorney?

  • It will cost thousands of pounds to set up, as opposed to a small fee if set up in advance.
  • You lose control over who manages your affairs and health decisions.
  • Again, it can cause stress and anxiety for your loved ones.

Again, 71% of our webinar audience said they didn’t have Power of Attorney, and 24% said they didn’t know. Taking action now could save you money and give you back control, which will all contribute to your financial wellbeing and help you to worry less about money.

Make use of your allowances

Did you know there are a range of ‘gifts’ from the Government that you can take advantage of? Depending on your situation, you may be entitled to some of the following:

  • Married couples’ allowance: If you have a spouse or civil partner and they’re not using their full tax allowance, you are able to benefit from this by using some of that allowance in order to save yourself tax.
  • ISA: These are completely tax-free ways to save money. If you’re not currently doing this, speak to a financial advisor about moving your money to an ISA.
  • Tax relief on life insurance premiums: If you set up a life insurance policy to come from your business, as opposed to personally, you are entitled to tax relief on those premiums. It will cost you less to have the same amount of cover!
  • Pension relief (25%): You will get a tax relief at your marginal rate of whatever contribution you make into your pension from the government.
  • Salary sacrifice: As an employee, you can opt to give up some of your salary and make a pension contribution with that, which will save you in tax.
  • Asset preservation trust: This is a free tool that guarantees that, when you die, no tax is paid on your pension fund.

Where do I start?

The first step with financial wellbeing is education.

To help educate businesses and their staff, Eight Wealth Management is offering tailored education sessions for any employer, free of charge. These can be provided online, or face-to-face (when it is safe to do so), so if you are interested in taking them up on this offer, please get in contact with Eight Wealth Management today.

They are also offering the same service to schools, to help children learn about financial wellbeing from an early age. According to Ian, the lack of financial education is a fundamental problem affecting the overall state of financial wellbeing in the UK. Children make judgements on how to deal with money from as early as seven years old, so it is incredibly important that they are taught about the subject as soon as possible.

Again, if you would like to talk to Eight Wealth Management about this free-of-charge service, please get in touch today.

To find out more about Financial Wellbeing and how to get financially fit in 2021, view our on-demand webinar here, or connect with Eight Wealth Management:

Facebook: www.facebook.com/eightwealthmanagement 

LinkedIn: Eight Wealth Management Ltd

Instagram: @eightwmltd

Website: www.eightwealthmanagement.co.uk

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