Financial wellbeing in Wales

Rhian Hughes, the Money and Pensions Service partnership manager for Wales, looks at the financial wellbeing challenges in the nation, and how we can help your organisation make a positive impact.

Financial wellbeing is about feeling secure and in control. It is about making the most of your money day to day, dealing with the unexpected, and being on track for a healthy financial future. In short: financially resilient, confident and empowered.

The Money and Pensions Service (MaPS) is an independent organisation set up by government, and we’re here to help your organisation to build financial wellbeing for your employees, customers and community.

As MaPS Partnerships Manager in Wales, my role is to help deliver this vision in Wales. This includes supporting and working with a wide range of businesses and organisations to improve financial wellbeing for their customers, employees and communities.

Even before COVID-19, there were significant challenges to financial wellbeing in Wales, such as:

• 15.5% of adults in Wales were over-indebted – that is, they found keeping up with bills and credit commitments a heavy burden, or had fallen behind on payments in three or more of the previous six months.
  
• 58% of adults in Wales felt that keeping up with their bills and credit commitments was a burden.
• 66% of adults in Wales were not satisfied with their overall financial circumstances.
• 27% of adults in Wales had less than £100 in savings and investments.
• 53% of working-age adults in Wales did not have a plan for their finances in retirement (1).

The ongoing COVID–19 pandemic poses substantial challenges in Wales. Around 230,000 people were employed in industries that were told to close during coronavirus, representing around 16% of the total workforce (2).

Naturally, this disruption has led to many workers in Wales struggling financially. According to the Welsh Government National Survey (2020), 17% of people said that coronavirus has caused problems for their household finances.

There are large numbers of people in Wales whose perception of their finances is negative. That’s really what financial wellbeing helps to change. Instead of viewing money as a burden or a worry, it should be viewed from a place of confidence and control.

Currently, over half of the adults in Wales (57%) don’t feel that they understand enough about pensions to make decisions about saving for retirement. Around half (51%) of the adults in Wales also don’t feel confident making decisions about financial products and services, while 42% don’t feel confident managing their money (3). 

These figures offer a sobering look at the state of financial wellbeing in Wales.

Research also shows a link between struggling with money and poor mental wellbeing. Feeling low can in turn make it tough to manage money, causing a cycle of low mental and financial wellbeing.

However, the good news is these problems can be dramatically improved through widespread and effective financial education, and raising awareness of the money guidance that’s available.This is a win-win situation for Welsh businesses and Wales generally because improved financial literacy will lead to improved financial wellness. Employees who are less stressed about money are more productive and happier.

Data from the Office for National Statistics (2020) shows the vast majority of companies in Wales have fewer than 10 employees. These smaller employers form the backbone of communities up and down Wales.

Research also shows that Welsh businesses owners are the most ‘community-conscious’ in the UK.

"Over three-quarters (83%) of business owners in Wales see their business as being particularly important to their local community."

The Co-operative Bank, 2019

That’s why MaPS believes that businesses are such key stakeholders in our mission to power up financial education and guidance in Wales. 

Sources

(1) Money Advice Service, 2018.

(2) Welsh Government, 2020

(3) Money Advice Service, 2018