Financial wellness is vital in the modern workplace – but what if your employees are struggling with basic financial understanding? Susie Logan explores the question with Declan Wilkes of MyBnk.
I’ve talked recently about the benefits of financial wellness for employees in a modern workforce, and how important financial literacy is in empowering people to look forward with confidence to their future.
But what if you’ve had no form of financial education at all? We hear a lot anecdotally about how young people have been left in challenging circumstances by demographic shifts and economic downturns; that they will struggle to own their own home or get on better than their parents did.
In the workplace, is that how young employees typically see the situation? Declan Wilkes is head of communications at MyBnk, a UK financial and enterprise education charity for young people – I met him to find out more.
Declan: Well, the surprising answer to your question is ‘not really’. Some millennials are hanging on to positively unrealistic expectations of retirement. And in addition to this, we think that many young people aren’t really equipped to work this out. We’ve found that typically, people struggle to:
- Calculate the impact of a 2% annual interest rate on £100
- Pay into a pension at all (over half do not)
- Read a bank statement
- Use internet banking
So how is the typical workplace responding to this?
Well, the truth is that barely half of employees benefit from workplace money guidance. And remember – newer employees may be walking into the office on their first day with £50,000 of student debt to work off.
Susie, you’ll know that Standard Life’s Insights into Financial Responsibility report found that 75% of employees say they would value more support from their employer around financial planning. We believe employers can benefit from listening to this demand. We estimate that more than 75% of young workers want to be told the truth about personal finance. They get that being financially literate means being able to make informed decisions about money – and it also means understanding financial products and how to make them work for the individual.
This is partly why more employers are recognising the importance of supporting employees’ financial wellbeing in the workplace with education programmes. At the same time, employers can benefit from the knock-on effect that financial education has on employee wellbeing, productivity and, ultimately, retention.”
So we were chatting earlier about MyBnk – where do you come in?
Putting it simply, MyBnk aims to reach young people just in time for some of their biggest ‘firsts’; from their first bank account, or moving out, to accessing credit and starting university or their first job.
Becoming financially literate is a journey, where skills, knowledge and confidence with money matters is embedded at school, practised in real life and continued in the workplace.
At MyBnk, we want to take what we have learned in the classrooms and youth organisations of Britain, and translate what works to offices, shop floors and factories, tackling everything from payslips, tax and spending to managing a tenancy and busting debt. It means extending that ‘just in time’ intervention to help young workers make an informed decision on pension auto-enrolment, for example.
How does MyBnk work in practice?
What we try to do is to bring a notoriously dull topic like money management to life by using interactive games, sport, digital skills, enterprise, and role-play mined from youth culture to make it a relevant and memorable learning experience. Trained experts deliver a range of workshops on things like banking, living independently, student finance and debt. The result?
- A 37% increase in understanding of tax, insurance, credit, interest rates and the impact of inflation.
- A 66% increase in understanding how pensions work.
- A 42% increase in ability to budget.
And we’re being recognised for this: our flagship schools’ programme ‘Money Twist’ has been given the UK’s highest effectiveness rating for any youth money skills project by The Money Advice Service.”
It all makes perfect sense to me as a parent of two young children – but what can young working people do now if they want to learn truth – and boost their financial education?
Well, despite the gloomy outlook we chatted about earlier, we know that if financial education is delivered by specialist and experienced trainers, is unique and fresh in its approach, and relevant to young people’s lives, it can have a hugely positive impact at home, at work and in life.
And this is because we know that being financially capable improves general wellbeing, confidence and even mental health. And more practically, spending time budgeting for just 30 minutes a week could save you on average £1,000 a year. It can help employees meet basic needs, such as rent, bills and food. And in the longer term, it can determine retirement plans or impact life choices such as a new job or having a family.”
Such a lot to gain!
Yes – such a lot to gain – for individuals, businesses and for the country as a whole – all for a small investment in financial education.
Declan – thank you very much and best of luck with the MyBnk project.
To find out more about MyBnk and their financial education programmes, please visit mybnk.org