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The importance of financial wellbeing for trust leaders

financial wellbeing
cost of living for teachers
financial planning
7 min

Oonagh Morrison, Regional Manager for Education at Wesleyan Financial Services, discusses the importance of financial wellbeing for academy trust leaders. From tailoring curriculums to prioritising retirement planning for teachers, read more.

Financial wellbeing has been a blind spot that is now starting to get the attention it deserves, with a growing appreciation of the wider implications for employee wellbeing and performance.

Still, research by the CIPD - the UK's professional body for HR and people development - found that only one in ten (11%) employers with health and wellbeing strategies actively focus on financial wellbeing, compared with 57% that actively focus on mental wellbeing.

But, with almost half (47%) of UK employees experiencing money worries, there's clearly an opportunity for employers to do more - including academy trusts.

So, what is financial wellbeing, and why is it so important for trust leaders?

Under pressure

The Government's Money and Pensions Service defines financial wellbeing as "feeling secure and in control of your finances, both now and in the future. It's knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future."

With this in mind, financial wellbeing has become an especially pertinent issue recently due to the cost-of-living crisis.

Personal finances have been under pressure over the last two years, as rampant inflation means prices have soared across the board - and teachers will have been no exception.

Between March 2019 and 2023, for example, energy prices increased by more than two thirds, while the cost of food rose by nearly a fifth.

And we are by no means out of the woods yet.

Long-term effects

While there are indications that interest rates will begin to fall during 2024, and inflation may be starting to slow, prices are still rising and living costs are still a challenge for many.

And, even as economic conditions improve, the disruption of the recent past will have thrown many teachers' finances into disarray, threatening their security and throwing their plans off course - issues that will have long-term effects.

For example, teachers may have now depleted their savings, compromising their ability to deal with unexpected expenses and leaving them in a more financially vulnerable state.

They may have been forced to delay or change their retirement plans for fear of not being able to afford to step back from the classroom. Indeed, one in six teachers surveyed by Wesleyan last year said they would have to reconsider their plans as a result of the cost-of-living crisis.

Some may have even has to opt out of their pension scheme, risking the viability of their retirement plans and increasing the risk of shortfall in their retirement income.

DfE data, analysed by Wesleyan in June 2023, found that the number of teachers leaving the Teachers' Pension Scheme between April 2022 and March 2023 for reasons relating to their personal finances had soared by 77%.

Others may have struggled to find an affordable home to rent, or to secure an affordable mortgage, or to remortgage their property, limiting their ability to live, or keep living, near to their place of work, family and friends.

Distracting and demotivating

It's easy to imagine why any of these circumstances would prove stressful and impact other areas of your life, including work.

The mental strain of living with financial worries can be immense, contributing to poor mental - and potentially physical - wellbeing.

At the very least, it can be a distracting and demotivating force in a person's life.

From the simple perspective of colleague care, supporting better financial wellbeing is important for general morale.

It might also help to reduce sick days, where colleagues take time of work due to mental or physical ill-health related to money worries - in turn saving schools from the cost of supply cover and minimising pressure on the wider workforce.

An effective financial wellbeing policy can also support staff recruitment and retention.

A workplace that includes financial wellbeing as part of a general commitment to staff health is, ultimately, a more appealing place to work and keep working, helping schools to attract the very best teaching talent.

This could even include keeping experienced teachers in the classroom for longer than they otherwise would if no support had been available.

For example, a thorough financial wellbeing programme can help educate teachers on the full range of financial options available to them, including flexible retirement.

This might also include taking a 'phased' retirement as an alternative to leaving the profession altogether. A phased retirement through the Teachers' Pension Scheme allows teachers to release some of their pension, but stay in work with a reduced workload, for the benefit of schools and students alike.

A supportive strategy

So, how should trust leaders approach the implementation of an effective financial wellbeing strategy?

The 'right' approach will very much depend on the unique circumstances of each trust, and those of individual teachers and support staff.

However, there are some general principles to keep in mind.

Approach financial wellbeing as part of the culture of your organisation

Financial wellbeing can't be a 'once a year' focus, or something to simply tick off a to-do list. It needs to be something that receives resource and attention throughout the year.

The sensitive - and sometimes taboo - nature of discussing financial issues should also be considered.

For best results, consider providing discreet, professional third-party resources and support that staff can access as and when they need to, privately. This reduces the risk of teachers taking no action or seeking no help because they don't want to disclose personal details or struggles to a colleague.

This sort of support might include signposting external sources of information and advice. For example, the Mental Health at Work website, curated by the mental health charity Mind, produced some excellent resources to support education staff during the cost-of-living crisis. This included advice on budgeting, benefits and coping strategies.

Tailor your circumstances, but keep an open mind

You'll be working with limited time and money to support a wellbeing programme, so consider taking the simple, but effective, step of asking your staff what wellbeing support they would value most.

A confidential staff wellbeing survey, repeated at least annually, can help identify areas to prioritise. Together with an expert partner, you can than deliver a programme that will provide the best possible bang for your buck.

Don't discriminate when it comes to retirement

It may not be a priority for staff at the beginning of their careers, but the sooner we all start planning for retirement, the better.

A robust retirement plan brings financial security and peace of mind, so ensuring that staff at all levels have support when it comes to retirement planning is vital.

This may be as simple as starting to understand their pension options and all the benefits of the Teachers' Pension Scheme. It would also be useful to discuss 'phased' retirement options - the benefits of which seem to have particularly low awareness among teachers.

According to a Freedom of Information request submitted by Wesleyan, just 3% of teachers retiring in 2022/23 took advantage of this option.

As mentioned above, phased retirement allows teachers to keep working - albeit fewer hours or in a less senior position - while taking up to 75% of their pension.

There are some more complex rules around it - for example, teachers' reduction in workload must mean that their salaries also reduce at least 20% - but an expert can help explain the rules and advise on what this means for individual circumstances.

Overall, it's a powerful option that gives teachers more flexibility in the direction of their career, and the shape of their retirement.

Bear in mind that while these points are helpful for supporting the financial wellbeing of your staff, they're also applicable when thinking about your own financial health.

Taking a year-long view, being clear about where you need the most support and considering all of the retirement options available to you will likely pay dividends for your wellbeing in the long run.

How can Wesleyan Financial Services help?

As a specialist financial services provider for teachers, we're on hand to help academy trusts on their financial wellbeing journeys.

We have a team of dedicated Specialist Financial Advisers ready to offer one-off or ongoing advice at every step of a teachers' career - from starting training to planning retirement.

Our advisers can provide financial advice on investments, mortgages and protection, plus guidance on the Teachers' Pension Scheme, delivered on a remote or in-person basis to fit around teachers' busy schedules.

We also support trust leaders and their staff on an individual basis, working with trusts to help build financial wellbeing into their schools and networks through financial education, including webinars

You can also find out more about financial advice for teachers on our website.

Wesleyan Financial Services is authorised and regulated by the Financial Conduct Authority. The information contained in this article does not constitute financial advice. The value of your investment can go down as well as up and you may get back less than you invested.

About the author
Oonagh Morrison profile
Oonagh Morrison

Regional Manager for Education at Wesleyan Financial Services

Oonagh joined Wesleyan in 2009 as a Specialist Financial Adviser in the education sector. She provided holistic financial planning advice to this market until April 2022, when she became Regional Manager for Scotland, Northern Ireland and the Northeast of England. She now dedicates her time to developing an established team and working with colleagues to ensure the needs of the education profession remain met.

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