Almost every business across Ireland has experienced a monumental shift in the way we work over the last 12 months.
At the inaugural Employee Wellbeing Summit, our panel of expert speakers explored the 'Future of Employee Wellbeing in Ireland'.
Our panels discussed the evolution of workplace wellbeing, financial wellbeing and emotional wellbeing. Speakers included:
- Marian Ryan, Consumer Tax Manager of Taxback.com
- Paul Merriman (aka AskPaul)
- Journalist & Broadcaster, Sinead Ryan
- Dr. Niamh O'Brien, Researcher and Lecturer in University College Cork
- Cathal Divilly, CEO - Great Place to Work
- John Goulding, CEO & Founder – Workvivo
In this blog, we have summarised the top 4 key financial wellbeing takeaways from this event. Be sure to keep an eye out for part two of this blog – this will cover the most important workplace wellbeing takeaways from the event.
Missed out on the Summit? You can watch it back at any time here.
1 - Financial stress can affect productivity
"We don't talk about financial stress enough."
Over half of Irish workers worry about money regularly. That was one of the key findings of a new Taxback.com survey of over 1,500 Irish workers. In the survey, 54% of respondents stated that they worry about money on either a weekly or a monthly basis.
Paul Merriman, CEO of Pax Financial Planning believes that financial stress can have a detrimental impact on work performance.
"We don't talk about financial stress enough in this country. And I think employers are starting to realise that if you have an employee who is having trouble in their financial situation, it carries over into the workplace.
"The positive news is that COVID-19 has brought these issues into the spotlight for employers.
"I know from my own work, we have been engaging with a lot more employers than before the pandemic. I can see that employers are really stepping up to the mark and doing everything that they can to ensure their employees are happy and have a good work-life balance."
The importance of financial literacy
Journalist & broadcaster, Sinead Ryan is certain that communication is key to enhancing the financial literacy of Irish workers.
"I believe that financial literacy should be taught to kids in schools, along with all other life skills. In school, you learn how to work out fractions and how to complete a balance sheet, but that is not what financial literacy is about.
"Financial literacy is about being equipped with the language to ask the right questions when you are making simple purchases – especially ones that involve long-term contracts.
"As a financial journalist, I see the downside of that lack of financial literacy. By the time people contact me, they already have a problem - something has gone wrong and they have lost money. With a little bit of communication, many financial problems can be solved or avoided.
"I think it would be super if we could equip people with the language skills and the numeracy skills needed to avoid these issues."
2 – Run your house like a limited company!
"Treat your savings like a bill!"
Many employees find themselves counting down the days until their next payday.
Merriman says that, by having a proper budgeting structure in place, a lot of stress can be avoided throughout the month.
"Everyone should run their house as a limited company with the parents acting as CFOs and MDs," he says. "And as the head of the household, both partners need to have a conversation with each other at least once a year to set some financial goals for the family and ensure that there is more money coming in than going out.
"For example, a good business will always make sure they are saving on their utility bills. And yet, many people never switch their personal utility providers – they get complacent and they get lazy. And the result is that they spend more money than they need to."
"Many people come to the end of the month and they look at their bank balance and they feel they have been mugged - but they don't know why," says Ryan.
"They know they have enough to pay their mortgage or rent, childcare and utility bills but they don't know where the rest of it goes. And in reality, it goes on what I call the 'known unknowns'. These are expenses, like Christmas and birthdays that we know are coming up, but because they do not occur every month – like an electricity or heating bill – we don't factor them into our financial planning, and this is why people end up in debt.
"This is why it is such a good idea to develop an expenditure and budgeting template," says Paul. "All it needs to do is record your salary, your outgoings like loans and your savings. That will give you a great snapshot of your finances each month."
Sinead believes that a solid savings plan should be a key part of any household budget.
"I always recommend that people should treat their savings like a bill. It's not something that you do with leftover money at the end of the month because you are never going to have leftover money. Instead, why not transfer some money into your savings account on the same day you pay your mortgage every month? If Revenue, the bank, Sky and Netflix all come in and take their bit from your wages, you need to come in and take your bit too! This will help you to better understand what your actual disposable income is."
3 – Taking control of your pension
"Employers have an obligation to inform their employees about their pension entitlements."
Ryan says there is a worrying lack of awareness among Irish employees surrounding the topic of pensions.
"It's never too early to start your pension. But there is a worrying lack of engagement on the topic. Often people don't even know what the questions are that they should be asking – they are afraid to seem silly or foolish," she says.
"We don't discuss our finances in Ireland and I think there is an awful lot that employers can do to normalise that conversation and help people to understand that there are no stupid questions."
So, what is the ideal time to set up a pension? And how much should be paid into it?
"Start by working out how many paydays you have left. For example, if you are 45 now, you have only roughly 240 paydays left! Figuring out how many you have left really concentrates the mind.
"If you only have 240 paydays left and you have 240 paydays after that which are not funded, ask yourself how are you going to distribute your money for each of those 240 months in order to protect yourself."
"Pensions are amazing – they are the best tax-efficient vehicle to grow wealth in this country," adds Merriman.
"People often ask if the SSIA scheme will come back. A pension is just an SSIA on steroids! And yet, nobody talks about it - probably because you don't get the money until you have retired.
"If your company has a pension plan in place and both yourself and your employer are contributing, you are going to have a really big asset in the future.
"While it is important to start your pension as early as possible, it is also important to look after yourself now. If you are in a company pension plan, and you are lucky enough to have an employer that will make a contribution on your behalf, that is probably a sufficient contribution in your 20s and 30s.
"And I wouldn't advise topping up your pension contributions unless you have a house, an investment account, an emergency fund and no personal debt. It's so important to look after your current situation before looking after the '65 year-old' you. Ultimately, it's all about balance when it comes to pensions.
"I believe employers have an obligation to inform their employees about their pension and let them know about their entitlements."
4 – Understanding your tax entitlements
"It's important that employers play their role in alleviating fear around tax."
Every year, thousands of workers around Ireland pay more tax than they need to. Marian Ryan, Consumer Tax Manager at Taxback.com says there is a general lack of awareness around what employees can claim.
"People have a fear of taxes and of the taxman," she says.
"This is especially true in the last 12 months for those that have received the COVID TWSS or PUP payments – they are fearful that they are going to have a big tax liability.
"But there are ways to reduce that tax liability. And I think it is important for employers to engage with their employees to help them to understand their tax entitlements and that they can reduce their tax bill or potentially be entitled to a tax refund. In reality, there are a huge amount of different tax credits and reliefs that people can claim, depending on their circumstances.
"Revenue is not the big bad wolf. Their job is to make sure that we are paying the right amount of tax. But they are also not going to ensure that you are receiving every tax credit and relief you're entitled to. It is up to all of us to ask that question – 'what am I entitled to?' It's important that employers play their role in alleviating this fear around taxes."
How to introduce a financial wellbeing initiative at your workplace
At Taxback.com, we have developed a financial support initiative that enables proactive employers to enhance their employees' financial wellbeing.
Our solution helps to reduce financial stress on PAYE employees as we ensure that they are availing of every tax-saving opportunity that they are entitled to.
How it works
- We create a dedicated portal for you to share with your employees
- Once the employee registers with us, we complete a four-year review of their taxes
- We submit the tax return on behalf of the employee
- Any refund due is transferred straight to the employee's bank account
Book a free demonstration