Financial wellbeing in Northern Ireland

Our partnership manager for Northern Ireland takes a look at the financial wellbeing challenges facing communities across the nation and outlines how the Money and Pensions Service can help your organisation to make a positive difference.

You can contact Margaret for free, bespoke support to incorporate financial wellbeing strategies into your organisation.

Even before the coronavirus outbreak, Northern Ireland faced some stiff challenges to widespread financial wellbeing. Using a range of statistics, we can get a sense of financial wellbeing across the nation, such as:

• 11% of people often borrowed to buy food or pay bills.
  
• 39% of adults (560,000 people) didn’t know what they needed to do to plan for retirement.
• 49% of working adults were financially ‘struggling’ – finding it difficult to save or keep up with bills – or ‘squeezed’ – having little provision for coping with income shocks. (MaPS, 2018).
• Half of families reported spending more than 20% of their overall household income on childcare, rising to 63% of income for lone parents. (Northern Ireland Childcare Survey 2019).
• Less than half (49%) of children and young people in Northern Ireland. reported having had meaningful financial education at school.
• In 2018/19, 19% of people in Northern Ireland (approximately 350,000 adults), were considered to be in relative poverty before housing costs, up from 16% in 2017/18. A further 16% of people (approximately 303,000), were in absolute poverty. That is, 2% higher than in 2017/18. (NISRA, 2020).

As the pandemic swept across Northern Ireland, COVID-19 exacerbated existing financial wellbeing challenges.

• 201,500 employers were using flexible furlough, as at the end of September 2020. (NISRA, 2020).
  
• In December  2020, 6.3% of the nation’s workforce were recorded on the Claimant Count. (NISRA, 2020).
• Over 33,000 emergency food parcels were provided by the Trussell Trust between April to September 2020 – 14% of people that benefited were in part-time employment.
• Given the scenario of job losses, this pandemic could mean that the Claimant Count could plausibly exceed 100,000. Anything above 106,000 has not been witnessed since the 1980s.

Looking at these stark statistics, it is clear that the financial resilience challenges within Northern Ireland are more substantial than ever. As communities and businesses adjust after the pandemic and in the post-EU period, I implore business leaders to acknowledge that the financial wellbeing of their workers is an important objective within their business plans, and to seek the free support of the Money and Pensions Services as their first tentative step towards a financial wellbeing strategy.

In the UK Strategy for Financial Wellbeing, MaPS states that “A financially healthy nation is good for individuals, communities, business and the economy”. Our financial resilience has a real impact on the fabric of our communities and wider society.  In other words, our individual financial wellbeing is inextricably linked to the financial wellbeing of our country. Changing things for the better is a big task and employers will be a central part of my work in Northern Ireland.

69% of employers report that their employees’ productivity is negatively impacted when they have financial worries and absenteeism and presenteeism caused by a lack of financial wellbeing costs UK £1.56 billion each year. (Centre for Economics and Business Research, Financial wellbeing and productivity: A study into the financial wellbeing of UK employees and its impact on productivity, 2018).

MaPS can support employers, starting with free and impartial money guidance products and services that can be weaved into their management practices seamlessly including their mental health strategies, as there is a strong relationship between financial wellbeing indicators and mental health outcomes.

I want to engage with employers to help them implement financial wellbeing strategies into their business. Money can be seen as a taboo subject, with individuals and organisations holding back from talking about it, believing it to be a confidential topic.

We must recognise that personal finances are often at the root of mental and physical health problems. By combining financial wellbeing with good conversations, we can start to shape a sound financial wellbeing strategy in any business and turn the statistics mentioned above into a positive situation for both workers and businesses.

Financial wellbeing is a journey, and your initial steps in offering practical support to employees will prove effective immediately. When the time is right for your business, you can move naturally towards other possibilities for example helping workers save directly through payroll. My role is to help you take those steps sustainably.

As households experience income shocks through redundancies or pay cuts, being armed with proper knowledge of lending is vital. Money worries are the biggest cause of stress for workers and damaging for business too however embedding financial education communication campaigns and resources will ensure your employees have support and guidance that they can avail of, at their convenience. Financial education teaches individuals basic skills like budgeting and saving – but it also teaches people how to borrow money safely and effectively.

I’m also particularly interested to work with organisations helping young people. We know that introducing financial education from an early age provides positive financial habits and embeds a solid platform to help guide people throughout their lifetime.

My hope is that the current difficult circumstances will help us lay the foundations to build a sustainable financial future for Northern Ireland. MaPS is here to help – so please do get in touch with me.