Understanding Financial Wellbeing

Financial wellbeing forms a key aspect of overall wellbeing as financial worries have a known impact upon an individual’s psychological health. 

Did you know that one in four employees report that money worries affect their ability to do their job and even people on higher incomes are still affected? Prior to the soaring cost of living in recent times, one in eight workers in the UK already lived in poverty. 

Financial distress is a term used to describe the ‘poor state of wellbeing when people struggle with their current finances or feel insecure about their future finances’. It’s determined by the extent in which an individual worries about money, the time spent dealing with finances and how hard they find it to make ends meet. 

In 2018, the CIPD’s Good Work Index found that almost half of UK workers (47%) experienced financial difficulties to some degree, and one in six (16%) were constantly struggling or even falling behind with bills. 

Whether you want to be more money savvy or require help with debt, there is support and guidance available to help you achieve that. Below is a summary of some of the support available, however always check the resources provided whenever you require support.

Understand your Finances

1. Work out your expenditure - there are recognised tools available online. 
2. Look to see if you can cut your household bills - checking you’re on the best tariff, stop using the tumble dryer, see if you can get a council tax rebate etc. 
3. Set a realistic budget - Banking apps can be used to set up pots of money for different expenses. Please check with your Bank to see if they offer this service or consider changing if they don’t. 
4. Sign up to Financial Wellbeing Support for example Money Saving Expert (Martin’s Money Tips, money helper). 

Boost your income

1. Check to see if you are eligible for any government benefits. Eligibility for these varies person to person, however, carers, families, disabled individuals, unemployed and low-income earners are all categories which may be eligible. 
2. Check if you can receive a charitable grant. If you have had a financial shock or become unwell, some charities offer grants which you do not have to repay.  
3. Check for pre-existing insurance policies which you weren’t aware of. For example, Accident, Sickness and Unemployment (ASU) cover or legal cover can sometimes be included as an add on to mortgage agreements, packaged bank accounts or home/car insurance. 
4. Consider renting out your spare room. The rent-a-room scheme allows you to rent out a room and earn up to £7500 per year without paying tax on this. You should consider the impact on your overall wellbeing needs and establish if this would affect any other benefits you receive, costs need to be reviewed before choosing to do this. You can find out more here 
5. Look at your energy bills. It’s well known that energy bills are currently very high and low energy tariffs are currently not available. It’s important to speak to your energy company if you are struggling to pay, to enable them to provide you with additional support. There are certain benefits which you may be entitled to and these vary depending whether you live in England, Wales, Northern Ireland or Scotland.

Help to pay for essential things  

1. If you’re already in receipt of benefits such as Job Seekers Allowance (JSA), Universal Credit (UC), or Employment Support Allowance (ESA) there are additional supplementary benefits that you may also be entitled to:
2. Supplementary benefits for parents or guardians include free school meals, parent’s learning allowance, childcare grants, and guardian’s allowance.  
3. Parents or guardians of children below school age may be eligible to claim free childcare hours depending on their circumstances, the number of hours allocated is also dependent on the age of the child.  
4. If you are a carer, you may be eligible to claim benefits such as carers allowance or carers credit. Further information can be found through Citizens Advice and Carers UK.
5. If you are working and on a low income you may also be entitled to claim some supplementary benefits. 
6. Some benefits such as children’s Disability Living Allowance (DLA) and Personal Independence Payment (PIP) are available for anyone with a chronic health condition or an acute health condition that will be present for six months or more.  
7. Children’s DLA and PIP are assessed based on the individual’s level of need and is not means tested, therefore children with working parents or adults who work, may still be eligible for these benefits.  Further information can be found here. 

Help with Debt

The most important thing that you can do is seek impartial debt advice as soon as you become concerned about repaying your debts. There are a number of trusted organisations offering free and impartial debt advice:

• StepChange: 0800 138 1111 (Monday to Friday, 08:00-20:00 and Saturday 09:00-14:00)
• Money Helper (Government endorsed) provides a list of online, telephone and face-to-face debt advice services.
• The Citizen’s Advice Bureau: online chat (Monday to Friday, 09:00-17:00).
• This website is endorsed by the government and explains some steps to take control of your debt.
• Breathing Space is a service, specific to England, which offers temporary protection from creditors that you owe money to, if you’re struggling with debts.
• In Scotland, a Statutory Moratorium can be used to protect you from Creditors making an application for you to be made bankrupt or protect them from Sheriff Officers taking action against you.
• You can claim bankruptcy if you cannot afford to pay your debts. This means that your debts will be written off but if you have any assets, these may be assessed to determine if they can be used to pay off any of your debts. 
• Debt Management Plans [DMP] can be set up to pay off non-priority debts in affordable payments. Your DMP provider can speak with your creditors on your behalf. All DMP providers must be registered with the Financial Conduct Authority.
• Administration orders are legally binding agreements between you and your Creditors to allow you to repay your debts over a period of time. 
• There are other options to pay off debts, but these can incur an upfront financial cost. It’s recommended that you consult some impartial debt advice before deciding which route to take to pay off your debts.
• If you have been summoned to court, you should always turn up to a court hearing as this provides you an opportunity to come to an agreement about your debt. If you don’t attend, decisions could be made regarding your debt without considering important information about your situation.

Money & Mental Health 

Psychological symptoms and mental health conditions can impact upon how an individual deals with money; however, money problems can impact upon an individual’s mental health. Feelings of guilt, shame, tiredness, and stress are all common symptoms experienced. More information about the support available can be found here:

• The link between money and mental health - Mind

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