Stress and anxiety are major contributors to poor mental health.
Since 2011 stress has been the leading cause of long-term sickness absence, while in 2018, it was officially declared by the Health & Safety Executive as causing more depression/anxiety in the workplace than musculoskeletal conditions.
The impact of stress on mental wellbeing is so severe that a recently introduced ISO standard (ISO 45003) urged employers to tackle the so-called ‘psychosocial’ risks of the workplace [such as poor job design causing overworking/burn-out].
But what workplace academics are now increasingly realising is the very great link between financial wellbeing and stress, and therefore the impact poor financial wellbeing has on overall mental wellbeing.
There are several indicators that experts say are substantiating this finding.
1. Financial anxiety equates to poor mental wellbeing
In recent years, behavioural scientists have unequivocally linked instances of financial anxiety with having a damaging contribution to people’s overall mental wellbeing – the impacts of which can last for several years. A US study in 2019 found more than half of Americans lose sleep at night due to having financial worries.
Unexpected expenses, in particular, have been found to cause stress levels that reach dangerous levels. In fact researchers at the University of Georgia have found that suffering serious financial penury, combined with it causing stress at the time, can result in physical health problems many decades later.
Simplistically, when people suffer stress, their ‘flight or flight’ parasympathetic nervous system is always ‘on’. This means they are triggering a cascade of stress hormones that cause real physiological changes. Unfortunately, the body can overreact to stressors, creating long-term effects on physical and psychological health.
2. Those in worse financial situations report worse mental health
Back in 2017 Willis Towers Watson revealed only 43% of staff were satisfied with their financial situation, and since the pandemic (which has seen millions furloughed and many others on reduced salaries), the numbers worrying about money have spiralled.
In recent research released to coincide with World Mental Health Day, it was revealed 9.5 million adults claim to have suffered from mental health issues as a result of financial anxiety. Half of these people worry about the day-to-day issue of making ends meet.
9.5 million adults claim to have suffered from mental health issues as a result of financial anxiety
Those still unconvinced about the link between pay and mental health should be left in no doubt by data from statistics from a recent ‘Thriving at Work’ report [PDF], which was categorical in its findings: amongst staff that describe themselves as “financially comfortable,” 41% report signs of poor mental health. But this figure rises to 51% for those describing themselves as “just about managing,” and 67% for those in “financial difficulty.”
3. Poor financial wellbeing links to poor financial decision-making
When people have limited resources it’s scientifically proven that they adopt a ‘scarcity mindset’ – whereby all attention is directed solely on how to get through the week/month.
This means people with poor financial wellbeing have a harder time making decisions that involve long-term thinking, which is key to financial planning and thriving.
What this means is: poor financial wellbeing can be self-sustaining if employees don’t have access to the right tools and this situation can contribute to poor mental wellbeing over time and long-term stress.
