Financial Advice Services – Why they’re important and should be included in your EAP

A financial advice service is a low-cost benefit that should be provided by organisations for their people. Many suffer in silence when it comes to finances. This can be due to embarrassment or because they don’t think they require help. Providing a free and impartial financial advice service for your people can help them improve their wellbeing and help stabilise their bank balance, which can allow them to save money or put themselves into a much better position. In this blog, we discuss the exact importance of having a financial advice service available for your people.

Facing economic insecurity can have a profound impact on your sense of safety and wellbeing. The Money & Mental Health Policy Institute have conducted research into the link between finances and mental health and found that people with problem debt are significantly more likely to experience mental health problems. Half (46%) of people in problem debt also have a mental health problem. 86% of respondents to a Money and Mental Health survey of nearly 5,500 people with experience of mental health problems said that their financial situation had made their mental health problems worse. People experiencing mental health problems are three and a half times more likely to be in problem debt than people without mental health problems (5%). 72% of respondents to Money and Mental Health’s survey said that their mental health problems had made their financial situation worse.

Financial difficulties are a common cause of stress, and stigma around debt can make seeking help difficult for individuals, who can consequently become isolated. Financial difficulty has been shown to drastically reduce recovery rates for common mental health conditions. A Money and Mental Health study found that people with depression and problem debt are 4.2 times more likely to be suffering with depression 18 months later, compared to people without financial difficulty. People in problem debt are also three times as likely to have thought about suicide in the past year. Suicide is a complex phenomena and there is usually a wide range of factors, life events and other circumstances that lead to suicidal thoughts or desires. However, there is a strong link between problem debt and suicide. In 2019 the NHS reported that more than 100,000 people in England attempt suicide while in problem debt each year.

In 2019, a study conducted by research firm Vitreous World reported that 60% of Londoners have skipped work because they could not afford their commute and 63% are more likely to reject a job offer because of the cost of commute. 89% source additional funds between paydays. 51% have applied for high cost credit, knowing they would struggle to make repayments but had no other option. 30% said that their frequency of pay affects their lifestyle choices. In addition to this study, it is known that mental health remains in the top 4 reasons for taken sick days.

We can quickly start to understand how finances affect our mental health and how this in turns leads to absence from work – and we can see that work itself may be playing a role in our poor finances.

With new research and figures being revealed, it becomes clear why having a Financial Advice Service in place for employees is so highly valuable. Not having enough money or having problem finances can negatively affect our day-to-day life and general wellbeing and mood which will transfer to the workplace. We may find we have to meticulously consider each purchase we make, decline spending time with friends, or we may have to cancel the membership at our favourite gym. This can put great pressure and stress on an individual, yet anyone who has made it through a period of financial turmoil will tell you that there is light at the end of the tunnel. Learning where to find support is often the first step.

In partnership with PayPlan, CiC offer debt management information that is delivered over the phone by our specialist advisors at PayPlan. These advisors examine financial commitments, spending patterns and much more. The 24-hour helpline provides access to experienced debt advisors, who will offer practical and realistic advice on the options are available to you.

You may be wondering how a Financial Advice Service works. Here is a case study from an employee we provided Financial Advice Service to (consent has been given to share this information). The employee was more than £10,000 in debt and was finding it difficult to manage their monthly repayments. This was causing them great anxiety and worry at home, and was effecting their concentration at work. When the caller contacted the AdviceLine, they were connected to a legal and financial expert who firstly asked the employee to provide them with an overall picture of their financial situation. This included details of how the debts accumulated, the type of debts and priority of each one. Priority debts were then considered and legal and practical advice was given on how to approach each creditor. They worked together to prepare a statement of means for the individual’s creditors, illustrating their current income and expenditure and a forecast of when their financial circumstances may change for the better. This was sent under cover of a standard letter to all their creditors, asking if they could reduce their monthly payments due to their current financial predicament. As a result, the caller was able to negotiate reasonable repayment terms with their creditors, which alleviated the stress of being in debt. The advisor also provided them with tips on money management for the future, to reduce the chances of this situation occurring again.

Our experienced and dedicated team of financial advisors provide clear and impartial advice focused on finding a realistic solution that works for each individual. Financial Advice Service’s can support with a variety of topics, including managing debt, budgeting, credit card, investments, pensions, savings, tax and banking.

In providing a Financial Advice Service for your employees, you are offering them expert help to manage their finances. Many do not seek financial advice because they don’t know where to start or because it is costly – the last thing you need when you are worried about finances. In providing and signposting your employees to this service, you alleviate those two worries and give your team the means to take that first step towards financial freedom. By taking such advice, your employees will see their financial difficulties improve, and in turn, their wellbeing lifted.