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Employee Wellbeing Q3 2022

Workplace wellbeing and cost of living impacts on staff mental health

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Andrew Berrie

Head of Workplace Wellbeing, Mind

There is a strong link between money and mental health, and employers have a role to play in supporting staff with their emotional and financial literacy.


The pandemic and cost of living crisis are taking a heavy toll on the nation’s mental health, including UK employees. These affect and worry us all — but not equally. People on low incomes and those who receive benefits because their mental health prevents them from earning enough to support themselves are among those affected the worst.

Impact on mental health

The relationship between money and mental health is cyclical. People with mental health problems are more likely to experience financial problems and typically earn less, while financial issues can worsen our mental health. Despite the high prevalence of poor mental health and financial concerns among employees, according to CIPD, only 18% of organisations have a financial wellbeing policy, either as part of a wider employee health and wellbeing policy (14%) or as a standalone financial wellbeing policy (4%).

People with mental health problems are more likely to experience financial problems and typically earn less, while financial issues can worsen our mental health.

Role of employers

Employers should create, update and appropriately resource their financial wellbeing policies. Policies should detail how the organisation supports employee financial wellbeing; how a supportive and inclusive culture surrounding financial wellbeing will be created; how support and communications will be tailored to different employee groups at different stages of their employee life cycle; and sources of free and impartial external support available.

Many people — especially those on lower incomes — face impossible choices regarding spending decisions no amount of careful budgeting can address. Existing benefits offered to staff — including hardship loans, pay advances, advice services or financial support such as travel loans or cycle to work schemes — should be well promoted and easy to access.

Having a sense of control of your personal finances is key to addressing financial anxiety. Educational programmes delivered in-house around budgeting, pensions and planning for retirement can be a great source of support.

Better working conditions

Employers should review their current hybrid working arrangements and consider the financial impact on employees of stipulated hours at home or in the office.

Employees should be given as much flexibility as possible in terms of hours and location so they can find a working pattern that least impacts their expenses and best supports their wellbeing. Such decisions will likely factor in the need to spend time with colleagues face-to-face, the costs of travelling to the workplace and the costs of energy consumed while working from home.

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