Right now, financial planning and talking about financial wellbeing is ever more important as we head into a cost of living crisis. After all, none of us would ever plan to be in debt or actively choose not to be able to make ends meet financially.
This guide will help you to evaluate your personal finances and direct you to sources of information & support, including the Bank Workers Charity who offer a range of services and help to current and former bank workers (including partners and dependents).
So, let's get stuck in and talk about personal finances.
What do we actually mean by 'cost of living crisis'?
Most of you will have heard at least some references to the cost of living crisis, but you may not know exactly what this means.
The cost of living crisis refers to the fall in what we call ‘real’ incomes - that's the actual spending power you have once your household income has been adjusted for inflation and tax. Since late 2021, the combination of high inflation and tax increases has meant a decrease in our spending power as wages aren't keeping up with inflation. In effect, when we accept pay increases below the rate of inflation, we're accepting a pay decrease.
Although the government has stepped in to try and soften the blow for households, the fact is that prices are rising fast and our income isn't keeping up. And prices and inflation aren't expected to drop any time soon.
Running a car, heating a household, feeding a household - all of these are becoming more expensive, and we're seeing a squeeze on the spending money we have available after paying all our bills. Everyone is hit by this squeeze, but it has a disproportionate impact on those in low paid work - for example, lower income households spend a greater proportion of their income on fixed costs like energy.
What is budgeting & why is it important?
Research shows that 39% of adults - that's 20.3 million people - don't feel confident managing their money. It's a rather startling fact.
Budgeting doesn't simply mean penny pinching and spending less, it means having a financial plan that allows you to live, work and do the things you enjoy, all while sticking within your spending means. In short, it means taking the time to ensure you don't spend more than you have available or can afford. Budgeting is also a useful way of setting out and visualising your progress towards short-term and long-term spending goals - such as a major purchase, buying that new pair of jeans you want, or having enough money to get through a month without reach for a credit line.
Budgeting is a useful tool for all of us - you never know when an unexpecting cost is going to land in your lap. Here are some signs that you should start budgeting now:
In the support section of this article, you'll find practical support and help to create your own budgeting plan.
Recognising the signs of a problem
Here are some of the common signs that you may need financial help:
Financial problems can arise from many different circumstances. It could be a short-term shock as a result of an unexpected expense or specific event, or it could be something that develops slowly over a period of time. Whatever the cause, it's important to spot the signs of difficulty and to act as soon as you identify a problem. These are just a few of the common events that can lead to financial challenges:
Talking about financial problems
It's important to talk openly to your employer about your financial situation, especially if you work for a Bank.
Banks must demonstrate financial integrity to the Regulators so customers trust the business and its staff.
Everyone has a responsibility to look after their finances sensibly, but there's no judgement on you if you find it difficult to make ends meet – there’s lots of help available to get things back on track and stay in control.
Your employer accepts that there may be situations outside of your control that can contribute to financial difficulties - including addictions - and you should always be treated with empathy when you make a disclosure.
We're often asked if being in financial difficulty means losing your job. In short, being in debt doesn't mean you'll automatically be dismissed. But you will face potential disciplinary proceedings if you’re not honest about your circumstances, if things have escalated, where there's suspected fraud or theft, or there's been a breach of security or other policy.
If your role includes giving financial advice, your employer also needs to assess any potential risks under schemes such as the Senior Managers Certification Regime.
Anything you share with your employer should be treated sensitively, confidentially and with discretion.
The most important message we can give you is to talk. Don’t stay silent if you're struggling. Your employer and others can help. Don't leave it until it's too late.
All about credit reports
As we've explored elsewhere in this guidance, it's important to talk openly with your employer about your financial situation, especially when it’s a bank.
The bank has an obligation to ensure that colleagues don’t represent a risk to themselves, customers or the wider business. This is why credit checks can be conducted on you to ensure your fitness to undertake your role. This is especially important where your role entails giving financial advice or having access to sensitive customer data.
Regardless of whether you're having financial problems or not, it's important in this digital age to keep a check on your credit reference - it's the gateway into your financial wellbeing and a prime target for mischievous fraudsters.
The good news is that it's never been easier to stay on top of your credit report and to be notified when there is any change - and you don't have to go too far to access this information either!
Many younger credit referencing agencies have been giving free access credit reports for some time, and now traditional credit referencing agencies are catching up. The banks, not to be outdone, have recognised the importance of giving you access to this information too.
We won't recommend which credit referencing agency you should use, but you can find useful information on the Money Saving Expert website that gives you more detail about free credit reports.
It's recommended you have regular access to your credit report.
You don't need to disclose the contents of your credit report to your employer on a regular basis, but there are times when you need to have that conversation with your manager. We recommend talking to your manager about financial difficulties before they become a problem and reach your credit report.
You'll need to let your manager know:
Find out how the Bank Workers Charity supported Zara after she experienced financial difficulties and fell into arrears.
Debt and rent arrears meant Helen was worried about losing her flat. Find out how the Bank Workers Charity helped her.
How the Bank Workers Charity have helped others
A single parent who couldn’t afford increased fuel costs. On a low income, she had debts and was waiting on child maintenance payments. Her rent was increased and even with benefits she couldn’t afford to pay. The Fund provided a grant of £1,500 for general living expenses, getting her back on track. BWC also signposted her to get more help with her utility bills and additional support for her children.
A client with long-term health conditions. On a low income, she was unable to pay for much-needed adjustments to keep her independence and was finding it hard to pay her bills. The Fund provided a grant for a new radiator and its installation, a freezer and an adjustable bed and BWC were able to arrange a care needs assessment, resulting on on-going care.
A client, with a young child who had fled domestic abuse. She was on a low income, had legal costs, and a lot of debt. The Fund provided a rental deposit, one month's rent in advance, a laptop, cooker, fridge freezer and a bed, totalling £3,000. BWC also signposted her to other charities and statutory support for further grants towards household essentials.
A client in debt. The client’s husband was self-employed, but lockdown had reduced his earnings Unable to afford unexpected costs to fix their home, they got into debt. They were recommended an Individual Voluntary Arrangement (IVA) but couldn’t go ahead as the client worked in a regulated role. The Fund provided a grant of £1,000 towards general living expenses helping the family get back on track and clear some of their arrears.
Support & contacts
There are many sources of support available to you:
And remember, if you’re an Accord member and need a chat about support at work, call the helpline on 0118 934 1808.
Find more mental health related articles on our website.
43% of workers says that being in debt makes it difficult to concentrate at work. And more than 16% of UK adults have debt problems.
Don't worry or struggle alone. Confidential expert guidance is available and on hand to help you with budgeting, managing creditors and debt management plans.
Benefits & cash grants
It can be hard to know where to begin when you start looking at state benefits or financial grants. That's why the Bank Workers Charity and others have put guidance together to help you get things organised.
We teamed up with the Bank Workers Charity for a webinar to talk about financial wellbeing, and what support is available for you.
The resource centre provides practical resources for people who are responsible for the health and wellbeing of bank employees.