Gethin Nadin

Gethin Nadin

Chief Innovation Officer

In the last decade, it became common knowledge that rents were rising, mortgages were getting more expensive, consumer debt was increasing… there was a real need for financial wellbeing in the workplace.

Now, in 2020, what has changed? Well, not much… Debts continue to rise, student loans are higher than ever, and consumer confidence remains low amid Brexit, and wider global, political uncertainty. Today, 62% of employees are affected by significant money worries, and financial concern remains top of employees’ list for third-year-running.

So, it would seem, the workplace’s current financial wellbeing strategies aren’t cutting it.

The state of the nation

On average, our finances are improving as a nation, but the recent election and looming uncertainty around Brexit have all led to a lack of consumer confidence, which ultimately leads to a worsening economy. Unfortunately, the statistics don’t make for comfortable reading:

• 52% of the UK borrow money to meet basic financial needs
• 45% run out of money between paydays
• 1-in-3 people have less than £1,000 in savings
Average student debt is now over £50K (risen from £44K in 2017)

So, are we educating employees on saving and getting out of debt in the right way? I think we need to get back to basics to help employees understand how to improve their financial wellbeing.

Compound interest

How many employers have advised their employees on the benefits of compound interest? Probably not many. Compound interest is essentially the principle of gaining interest on your original savings amount, plus interest on your interest. Getting our employees (especially the younger ones) to understand this can significantly help in securing their financial future.

Compound interest means that Person A could put £3,000 into a savings account each year for 10 years from their early 20s to early 30s, contributing a total of £30,000. By the time they’re 65, that account could have accumulated £642,560, completely in interest.

Person B could pay £3,000 into their savings account every year from their early 30s until they’re 65, contributing a total of £102,000, but still only accumulating £513,950 including interest.

So, with compound interest, it’s ((money + interest) x interest) x TIME which is the important factor in accumulating savings, and that’s why it’s so important for younger employees to save at the earliest opportunity.

Let’s take a step back

Rather than focus on all the tools that are out there, let’s focus on what finance experts and psychologists tell us about financial wellbeing. There are five main principles of good financial wellbeing. In order to understand these, first, we must look at the things people do to get themselves into financial difficulty in the first place:

Paying for things late
Not only does this affect your credit score, but just one missed or late payment can take 6+ months to recover from. It also leads to ‘burying your head in the sand’.

Failing to budget
I’m terrible at budgeting! But setting a clear budget and sticking to it is what will keep you living within your means and not overspending.

Not tracking expenses
This is the old ‘coffee-a-day’ scenario. Someone drinking a Starbucks latte on the way to work each day is spending around £655 per year on coffee. People need to keep a track of what they are spending to identify areas of waste.

Using credit cards for everyday purchases
Credit cards should only be considered ‘emergency money’. Using them every day is a slippery slope.

Taking out payday loans
Most people who do this already know it’s a bad idea, but in times of need, it might be the only option. Borrowing just £250 for four months could see you pay back £650 in interest alone.

From an employer perspective, we must look at whether financial wellbeing strategies are tackling these areas. Many strategies may focus heavily on understanding pensions, or getting out of debt – then leaving employees to save without support. Or vice versa, some schemes may emphasise saving, but not acknowledge the fact many employees are too in debt to save. The bottom line is that trying to prevent employees falling into poor financial wellbeing is as important as tackling those who already have a problem.


If you’re ever in doubt about where to focus financial wellbeing, just think about Pepsi. Really. The acronym stands for Protection, Earnings, Pension, Savings, Investments, and will ensure you don’t forget about any areas of financial wellbeing.

Protection – Everyone should ensure that their lives are protected. If the worst should happen, will the family be looked after, and will the mortgage be paid? Life assurance is a benefit that most employees have available to them, but probably don’t understand the impact having it can have on their lives.

Earnings – Protect your income. Having insurances in place to keep your income in the event of long-term illness or disability is vital. Income protection is a benefit that many employers offer, but many employees don’t understand it. Could it be an addition to your benefits scheme, or something your communications can highlight?

Pension – Protect your retirement. As an industry, we have really come a long way in making sure employees understand their pension and are encouraged to take one out. However, I don’t think we are doing enough to warn employees of the dangers of retirement without enough money. Do you tell your employees to work out how much they need for retirement, so that they can figure out how much to pay in now? Do you have education and support for those who can’t afford to pay in that much?

Savings – According to the most basic advice, only once employees have all the above sorted should they consider saving money. Many employees still carry credit card balances as well as savings accounts. Paying off debt that is gaining the most interest should be a priority before employees think about savings. Debt is slowly making the situation worse, so shortening the life of that debt will pay off more in the long term.

Investments – The last thing on the list for people to think about is investments. This covers a lot, and is something that employees may need help with suddenly. An inheritance or a house sale could immediately put an employee into a debt-free situation where they now wish to invest. If this happens, employers need to be able to offer support to them so that this money can be invested wisely.

An outcome, not a product

At Benefex we’ve often spoken about how employee engagement is an outcome, not a product or a process. It’s the same with financial wellbeing. Many people claim to be ‘financial wellbeing’ providers when in fact, they are simply money-lenders. While debt consolidation is a great idea and can really benefit some employees, it must come hand-in-hand with more education. Employees need to understand the impact of consolidating debt, so that once they are debt-free, they don’t fall back into the same habits.

Financial wellbeing must be viewed in the same light as any other type of wellbeing. A crash diet might take off a couple of pounds in the short-term, but overall what’s really required for a healthy body is also having a healthy mind, understanding what healthy looks like for you, and learning how to be accepting of your body. Our finances must be treated in the same way; start with education, and a better understanding of our personal finances and habits. Only then, can we begin to save, invest, and thrive.

This blog was originally published in August 2017, and was updated in February 2020.

Gethin Nadin

Gethin Nadin

Chief Innovation Officer

Gethin is an award-winning psychologist who has been helping some of the world’s largest organisations to improve their employee experience and wellbeing for more than two decades. The last 11 years have been spent working as part of the senior leadership team at Benefex where Gethin leads thought leadership as Chief Innovation Officer.

As a frequent writer and speaker on employee experience and employee wellbeing, Gethin has been featured in Forbes, The Guardian, The Sun, The Huffington Post and The Financial Times as well as all major HR, Reward and Pensions publications. Gethin has been listed as one of the world’s top 101 Global Employee Experience Influencers for the last two years running, is listed on the Employee Engagement Powerlist, is one of LinkedIn’s top global contributors and an Inspiring Leader 2021. Gethin is also a regular keynote speaker, ex-Chair of Wellbeing at the UK Government-backed Engage for Success and a Fellow at the RSA.

In 2018, Gethin published his first book - the HR bestseller ‘A World of Good: Lessons From Around the World in Improving the Employee Experience’, which has gone on to inspire HR and Reward teams at some of the world’s best known brands. In early 2022, Gethin co-authored his second book ‘Das Menschliche Büro - The Human(e) Office’ a collaboration between leading academics and workplace professionals from across Europe. In October 2022, Gethin published his “third” book ‘A Work In Progress: Unlocking Wellbeing to Create More Sustainable and Resilient Organisations’ which also became an immediate bestseller.

A World of Good: Lessons from Around the World in Improving the Employee Experience
A Work In Progress: Unlocking Wellbeing to Create More Sustainable and Resilient Organisations