- Report highlights need for workplace financial education
- Makes financial wellbeing a priority for Government
- Committee noted the important role that fintech can play in addressing financial inclusion
Employers have a key role to play in countering financial exclusion amongst the UK’s 30 million strong workforce, according to a report by the House of Lords Select Committee on Financial Exclusion. The Report, ’Tackling financial exclusion: A country that works for everyone?’, says employers have a direct interest in the financial wellbeing of their staff. It was published on 24th March, evidencing Neyber and Chartered Institute of Personnel and Development research.
The Committee said:
“Employers can play an important role in preventing financial exclusion and promoting inclusion. There is an imperative for employers to be proactive in this field; we were told of research1 suggesting that 70% of UK employees admitted to wasting a fifth of their time at work worrying about their finances and that at least 17.5 million working hours are lost each year as a result of workers taking time off due to financial stress.”
The detailed enquiry by the Committee sought evidence from Government, regulatory, industry and third sector sources on the cause, scale and solutions to financial exclusion.
The Committee also considered the increasing array of financial inclusion products that relied on the use of FinTech, including Neyber, the market-leading provider of salary deducted lending.
The report also stated: “We have been told that the workplace offered an ideal opportunity to continue financial education, noting that employers have a direct interest in the financial wellbeing of their staff and were partially responsible for continuing professional development. They went on to suggest that employers could add financial literacy to company induction and training programmes.”
In a separate survey, carried out by the Chartered Institute of Personnel and Development in January 2017, 25% of employees reported that financial problems were affecting their workplace performance; the figure rose to 30% for public sector employees.
The Committee further acknowledged how poor financial literacy compounded financial exclusion and referenced Neyber’s belief in the benefits of workplace financial education. It stated that:
“Around one third of the UK population (17 million) struggle to routinely manage a budget and 1 in 6 people struggle to identify the balance on their bank statement. Within this context, the need for financial education is more apparent than ever with younger people becoming increasingly exposed to financial choices.”
Neyber Co-Founder and Chief Strategy Officer, Monica Kalia, said:
“I’m encouraged by the emphasis placed in this report on the value of financial education. It’s vital that the Committee’s recommendations are acted upon by the Government and employers alike. This is because supporting the ongoing financial capability of employees will benefit the UK economy. We asked the Committee last year to recommend that UK employees are given a statutory right to access low cost loans repaid by salary deduction and free financial education in their workplace. Research suggests that financial worries can negatively affect workplace productivity; employers therefore have a clear self-interest in the financial health and wellbeing of their employees. Supporting the ongoing financial capability of employees will, in the long-term, be of benefit to employers.”