Are employers doing enough to drive financial literacy?

Are you confident in your financial literacy?

ANZ’s 2015 Survey of Adult Financial Literacy shows that Australians are fairly self-assured with their money management skills – 78 per cent claimed they feel in control over their finances most or all of the time.

30 per cent of employees are either ‘financially unwell’ or ‘show room for improvement’.

The ratio of debt to income has also climbed from 64 per cent to a whopping 185 per cent during that time. Clearly, Australians are more optimistic about their financial acumen than their bank balances would suggest.But is this the whole story? After all, the average Australian household debt was four times higher in December 2015 than it was 27 years earlier, according to AMP.NATSEM figures.

Many people may be unaware of exactly where they’re going wrong with their finances, yet help may available from an unexpected source – your boss. But how can companies improve your financial literacy? And why would they?

Assessing your financial wellness

CoreData research revealed that 30 per cent of employees are either ‘financially unwell’ or ‘show room for improvement’ regarding money matters.

Citing analysis from PwC, the report estimated that poor financial wellness costs Australian businesses $33 billion a year. Businesses also claimed money troubles led to considerable stress, low morale, absenteeism and presenteeism among staff, all of which can dramatically impact performance.

Sadly, few employers appear to be supporting their workers with these matters. Only 15.2 per cent of organisations reported having a financial wellness program, despite a six-fold improvement in staff financial health for those that do when compared to companies without an initiative.

The good news is that businesses recognise the importance of teaching employees better financial literacy. Sixty-two per cent of employers said such programs are very or extremely valuable, and 58 per cent would like to see workplace super advisers provide more support in this area.

What can I do?

If you’re an employer, organising one-on-one sessions between your employees and a financial adviser could deliver great results. CoreData’s survey found that nearly 90 per cent of employers found this approach valuable. Helping employees better understand their retirement needs and offering investment advice were also popular strategies among employers.

However, employees shouldn’t suffer in silence. Discussing your situation with an employer is one possibility, particularly if your financial concerns are affecting your work.

If you don’t feel comfortable with that approach, try a financial health check tool to evaluate your current circumstances and identify areas where you can improve.

You may also wish to book an appointment with an adviser to talk through your financial planning options.

What you need to know

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, Invest Blue Pty Ltd and its subsidiaries operating as Invest Blue, 1300 346 837 and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Please contact us if you want more information.