Almost a quarter of UK workers (23%) have had to borrow money from family and friends in the last year because of money worries, and almost a fifth have taken on debt (18%). It seems financial worries have become the new normal. With almost 14.6 million UK adults not coping financially or finding it difficult to cope, many are looking for ways to help ease the strain on their finances.
Financial coaching offers a powerful tool to help people overcome money worries and get on track with their finances.
WEALTH at work outlines 4 key ways that financial education can help people get on track with their finances:
- Building positive savings habits
Building new habits can be difficult, especially when it comes to money. Financial education can help people navigate challenges such as managing a budget and help them establish and stick to positive money habits. It can also help individuals recognise unhelpful patterns and reinforces positive savings habits and enables them to be more considered about spending.
- Putting a financial plan together
Financial education can help people understand the importance of putting a financial plan together, including the value of an emergency fund to build financial resilience for unexpected events, for example, if the car breaks down or they face redundancy. It can also help people understand how small savings can compound over time, and how this can grow and help them meet future goals such as buying a house.
- Preparing for retirement
One of the most crucial elements of financial planning is retirement preparation. Our research found 39% of employees think they won’t ever be able to afford to retire at all due to increasing costs. Financial education can help people understand how to make retirement affordable and achievable. Not only this, but it can also help individuals realise all the options available to them at the point of retirement.
- Driving action
Financial education can help people get a firmer understanding of their situation, so that they can then take steps to improve it. This could include increasing pension contributions, reducing debt, saving tax or utilising workplace savings such as ISAs.
Jonathan Watts-Lay, Director, WEALTH at work comments;
“Many leading workplaces want to support employees to be financially secure and offer financial education as part of their benefits package. People should make sure that they speak to their employer to see how they can help.”