In 2025, financial wellbeing will regain its position at the forefront in workplace wellbeing strategies.
The cost of living crisis has had a profound impact on the finances of employees. Employers will be asked to prioritize financial support in a way that resonates deeply with their employees.
Money and mental health are linked in a cyclical way
Nearly 3 out of 4 employees will be worried by the economic climate in 2025. are these concerns causing poor health in 45% of employees. The status of the economy has become the number one issue for employees in nearly every region.
Employees who worry about money can experience a stress reaction that lowers resilience to challenges in their wellbeing, including mental health. A recent survey found that around half of employees believe that money has a negative impact on their mental health, and this in turn impacts their ability to perform at work.
There is a cyclical and clear relationship between money, mental health and well-being. This bidirectional relationship has been proven by several large, recent studies (from American Psychological Association Amsterdam University of Applied Sciences, and Science).
Savings as a benchmark for wellbeing
Financial well-being correlates with general wellbeing in a number of complex and compelling ways. The size of a person’s savings is one factor that contributes to their overall well-being.
The majority of adults in working age with low wellbeing do not have any savings. There is also a correlation, at almost all income levels between the savings of employees and their overall well-being. The majority of evidence indicates that employees who are able to build stronger savings accounts have a better relationship with their money, feel less anxious about money, and report higher overall wellbeing.
Employers who help their employees build larger savings pots can have a far-reaching impact on individual well-being.
We will probably see employee discount schemes reappear in 2025. They will support employees in building financial resilience, without increasing their expenditure or adjusting their budget.
Employers can make wages go further by increasing their pay when wages are stagnant or barely rising. There is also compelling evidence to suggest that employees’ wellbeing improves when they are supported with savings. The more money a person saves every month, the greater the chance that they are “mostly” or ‘completely” happy with their lives . This effect is stronger for employees with lower incomes.
We feel good about saving money
Employee wellbeing is affected by saving money on goods and services. Saving money has a number of positive outcomes, including enjoyment and excitement. However, savers experience an 14% increase.
Employers who help their employees build larger savings pots can have a positive impact that goes beyond the individual. has shown how even small increases to savings can improve family life. Saving money can also improve the quality of sleep for employees. One study examined people over ten years and found that the more they saved and the more regularly they saved, the lower their financial anxiety and the better their sleep.
The Path to PS1,000 in 2025
75% of Brits said that saving PS1000 in a bank account would make them happier.
New evidence shows us the exact amount we should save.
In 2024, YouGov discovered that people with less than PS1000 saved were three times as likely to have poor mental health than those with more.
research by Atom Bank also found that 75% of Brits said they would be happier if they had a savings of PS1000 than if they spent PS1000. The magic number is PS1000. If we can get more people to save this amount, then workplace productivity and engagement will increase.
Supporting your wellbeing is as important as your salary
Many people who are following the pandemic have hailed it as a trend. However, evidence shows that employee expectations about how their employer supports them continue to increase.
In 2025, employers will be expected to say they care more for their employees than ever before. There is an increasing “employee-care perception gap” – a difference of 28% between the way employers feel they care for their employees and how their employees feel.
Employers must show their employees that they are committed to them by offering more benefits.
In the past few years, employees have been increasingly stating that they value wellbeing as much as their salary. 93% were in agreement with this statement by 2022. This figure is expected to rise further in 2025.
Last words on retention and wellbeing
Take note before we wrap up this spotlight on financial well-being in 2025. Employers who offer benefits that support and improve their employees’ wellbeing are far less likely to quit, and they also work harder.
Just under the half of employers worldwide say that rising costs are the primary reason for investing more in health and wellbeing. It is clear that employers who invest more in wellbeing will reap the rewards.
