Financial wellness. · 2020. 6. 11. · Financial wellness support has a much longer lasting effect than other programs and it aligns well with the overall business strategy – keep

Financial wellness.A smarter way to solve Australia’s $30 billion productivity gap

2020 REPORT

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WISR LIMITED | F INANCIAL WELLNESS REPORT 2020

Financial stress in the workplace is real and employers need to understand how it affects their employees. Just as Australian businesses have embraced health and wellbeing, financial wellness is no different and has a much longer, lasting effect.

ABOUT THE RESEARCH IN THIS REPORT

A NOTE ON COVID-19

The insights of this report are drawn from the responses of 1078 Australian employees to Wisr’s annual Financial Wellness Survey.

The survey consists of several questions selected from global and domestic research to measure subjective financial wellness. The questions cover the four key aspects identified by the literature to encompass financial wellness, including an individual’s ability to manage day to day expenses, having enough in emergency funds, feeling confident they are saving enough for their future and a sense of financial satisfaction in their current financial position.

Wisr’s Financial Wellness Report 2020 was completed prior to the onset of COVID-19. Future reports will take into consideration the impacts of this global event and the flow on effects to an individual’s financial wellness.

The questions also measure the extent to which individuals feel confident in their knowledge and practical application of financial literacy, both of which are essential for developing a state of financial wellness.

On completion of the survey respondents were scored according to their subjective confidence rating on each question and sorted into 5 different score bands, each with an associated wellness rating. Findings from the respondents’ answers have been used to provide insights in this report.

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Contents.Our Vision.

The state of Australia’s financial wellbeing.

Financial pressure is real.

Managing personal finances.

Debt is a vicious cycle.

More pressure on financial wellbeing.

Stress at work - a $30 billion problem.

Improve money matters with financial wellness.

Next Steps for Employers.

Contact us.

About Wisr Limited

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Wisr’s vision is to bring financial wellness to all Australians. This means striving to deliver the very best financial choice, consumer products and investment outcomes across everything we do.

We want our customers to feel confident in their ability to manage their finances and have the knowledge to make good financial decisions.

By giving our customers access to smarter and fairer credit, providing them with products which increase their financial literacy and capability, as well as tools to help them pay down their debt faster, Wisr aims to give our customers the best possible chance of increasing their financial wellness.

Our vision is to bring financial wellness to all Australians.

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More than 7 million working age Australians are experiencing financial stress.1

MODERATELY HIGH

16.8%

VERY LOW

LOW

HIGH

MODERATE

15.8%

29.5%

5.9%

32.0%

Source: Wisr research of 1078 Australian employees

17.6/40

Our financial wellbeing is below average and scores

Our data shows that Australians display below average financial wellness levels, and that there is a clear need for financial wellness programs within Australian businesses.

Wisr asked more than 1000 Aussies about their financial wellbeing, and here are the results.

1Calculated using results from Wisr’s Financial Wellness Survey (2019) and ABS Research Data (2019).

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for a sound financial future, and the financial freedom to live our lives comfortably.

Of the 1078 employees surveyed nearly 45.3% identify with being financially stressed. The research also shows that 65.5% of Australian employees don’t feel like they have enough in emergency or “just in case” funds. It also shows that in addition to low savings, 33.9% of employees couldn’t confidently meet their daily cost of living, telling us that they struggle to pay bills and manage their day to day expenses.

Financial pressure is real for many Australians...Australians are working harder but when it comes to our personal finances we’re feeling the pressure.

Nearly 7.5 million working age Australians2 (15-64), are experiencing a high level of financial stress and it’s taking a toll – not only on people’s home life, but also on their place of work.

Financial wellness is used as a benchmark to measure how financially fit we are as a nation. It is determined by four proof points; control of personal finances, the capacity to absorb an unexpected financial shock, the capability to plan

Understand your employees’ situation. Take a pulse assessment on how your employees are feeling about their current financial circumstances. This can be done through an internal survey like an employee net promoter score (ENPS) or externally in the form of a financial wellness survey.

33.9% of Australian employees are struggling to pay the bills.

Staff are working pay-to-pay, and lack confidence.

EMPLOYER FINANCIAL WELLNESS STEP 1

2Calculated using results from Wisr’s Financial Wellness Survey (2019) and ABS Research Data (2019).

Identify staff needs. Review and analyse the feedback data to understand where your employees are on their financial journey and what their needs are.

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...and most Australians are in the dark when it comes to managing personal finances.The most common barrier to financial wellness for Australians is personal financial insight. More than 84% don’t have enough financial knowledge to make confident decisions about money.

Knowledge is power and if we don’t know about something we can’t make an informed decision on what the problem is or what to do about it.

For example, the research found 58.1% of employees do not use financial management tools, and only 13% use smartphone apps to help them understand their finances.

This research highlights a significant opportunity for the financial knowledge of Australian employees to improve. Employers stand at the forefront of this opportunity to provide staff with resources and education about finance.

The relationship between an employer and employee is inherently a financial one. Time and effort is exchanged for pay and benefits. It is for this reason, among many others that the workplace is in fact a very appropriate and somewhat trusted place for finance to be discussed.

84% of employees don’t have enough financial knowledge to make confident decisions.

7.5 million working Australians could improve their financial state by using tools such as smartphone apps.

If we don’t know about our money, we can’t manage it better.

Businesses have staff with little knowledge of where their next pay will go.

58% of employees don’t use a finance tool to manage their moneySource: Wisr research of 1078 Australian employees


Australia had a national interest accruing credit card debt6 of $29Bn.

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3Finder.com 4ABS Research, 2019 5ABS Research, 2019 6Finder.com

Many Australians seek credit at some stage in their life. As a credit provider we see that many find they are unable to access fair rates due to poor credit profiles. This, coupled with high household and credit card debt, places huge amounts of financial stress on Australians.

Debt is a vicious cycle.

Australians, on average, owe $183,900 across mortgages, student debts and personal loans4.

Approx 73% of Australian households are in debt, with 28% servicing a debt that was 3 times their annualised disposable income5.

On average, Aussies in 2019 owed $3,264 on their credit cards3.

Use of high interest credit

Short on finances

Unexpected cost

Higher interest repayments

Poor financial position

Pay expenses

Same income

Low financial knowledge results in low confidence levels.

An inability to have financial conversations between employer and employee leads to unchecked amounts of financial stress.

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Align staff needs to your business strategy. Ensure that the needs and requirements identified by your employees, align with your current business strategy and has senior leadership approval. Find out if any of your current offerings could be tailored to better suit your employees’ needs.

This is putting more pressure on our financial wellbeing...Because of the lack of personal finance insight, Australian workers are hurting when it comes to planning for their future. 36.7% are not confident at all about their future financial plans. Most lack confidence and only 11% are sure about their future financial plans.

Even more concerning is the high (61.3%) rate of employees who admitted they’re not securing their financial future through saving, investing or contributing to superannuation.

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63.5% of employees struggled to pay a bill, credit card or loan in the past year

Source: Wisr research of 1078 Australian employees

More than 60% of Australians aren’t securing their financial future through saving

Nearly 2 in 3 Australians don’t believe that they could handle a major financial expense such as physical injury or large asset repair



Without adequate savings, working Australians believe they would struggle to cover a major financial expense, such as physical injury or repair to a large asset like a car or their home.

It is at this point where people reach out for credit and often are stressed and unable to access low rates because they haven’t built their credit profiles.

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Implement wellbeing improvement options. Once satisfied with your strategic alignment, look to find products which offer the services that your employees need. Implement these products or services and measure the results against key metrics to determine the success of the program.

Personal financial hardship is one of the biggest causes of workplace stress and lost productivity.

In fact, employee financial stress is amongst the largest contributors to lost productivity in the workplace, costing Australian businesses about $31 billion7 every year – irrespective of the person’s position or level of income.

And, according to AMP’s research, 24% of women were found to be in

…and it’s showing with more stress at work – a $30 billion productivity burden.

7AMP research: https://corporate.amp.com.au/newsroom/2019/january/financial-stress-costs-busi-nesses-billions-in-lost-revenue8https://www.businessinsider.com.au/australia-economy-financial-stress-debt-house-prices-2019-2

Employees with poor financial wellness are more likely to take time off work, lose focus and be looking for a new job.

To combat lost productivity and absenteeism, strategies aimed at improving employees’ financial wellness should be a key priority.


Financial stress is costing Australian businesses >$30Bn in lost productivity.

13x more likely to take time off work

11x more likely to struggle focusing

8x more likely to be looking for a new job

And, financially burdened staff are…

financial stress compared with 14% of men. Furthermore, NAB research8 found almost 40% of Australians reported experiencing some form of financial hardship in the last quarter (2019), the highest in two years. This was also most prevalent among women.

The result is clear: poor financial wellbeing is bad for both staff and employers.

Despite the barriers, the good news is there are many options for employees and businesses to improve financial wellness.

Australian businesses have embraced many health and wellbeing programs – from healthy food to gym memberships – and financial wellness is no different. Financial wellness support has a much longer lasting effect than other programs and it aligns well with the overall business strategy – keep staff at work and enjoy work.

Globally, Forbes ran a report9 in early 2020 on financial wellness now being the new “must have” employee benefit. PwC’s Employee Financial Wellness Survey10 for 2019 found more employees than ever report being stressed about their finances. Employers who understand the impact of financial stress in the workplace can easily offer solutions for their employees’ financial wellness.

For example, Wisr’s own research found that the largest amount of financial stress from employees is coming from

unpaid credit. Allowing a salary sacrifice loan repayment before the employee receives their pay reduces debt levels and a credit risk profile.

Almost two-thirds of all Australian employees surveyed achieved a below average financial wellness score, with significant inability to pay down debt, secure their futures or have savings or emergency funds available. There is an important role for employers to step in and help change their employees financial wellness level and improve their company’s productivity and staff retention.

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But financial wellness solutions improve money matters.

Access to fair credit Behavioural-based toolsSalary sacrifice loans integrated with payroll

Financial education programs

The many options to improve financial wellness include...

9https://www.forbes.com/sites/forbesfinancecouncil/2020/02/06/financial-wellness-the-new-must-have-employee-benefit/#220c31ff533810https://www.pwc.com/us/en/industries/private-company-services/library/financial-well-being-retirement-survey.html

INCREASED FINANCIAL WELLBEING RESULTS IN…

Higher productivity

Less stress

Reduced absenteeism

Employees who feel their employer understands their situation feel more empowered and productive.

Once satisfied with your strategic alignment, find products that offer the services that your employees need.

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Next Steps for Employers.

Take a pulse assessment on how your employees are feeling about their current financial circumstances. This can be done through an internal survey like an employee net promoter score (ENPS) or externally in the form of a financial wellness survey.

Understand your employees’ situation.

Identify staff needs.

Align staff needs to your business strategy.

Implement wellbeing improvement options.

STEP 1

Review and analyse the feedback data to understand where your employees are on their financial journey and what their needs are.

STEP 2

Ensure that the needs and requirements identified by your employees, align with your current business strategy and has senior leadership approval. Find out if any of your current offerings could be tailored to better suit your employees’ needs.

STEP 3

Once satisfied with your strategic alignment, look to find products which offer the services that your employees need. Implement these products or services and measure the results against key metrics to determine the success of the program.

STEP 4


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Contact the Partnerships team at Wisr if you are interested in establishing a Financial Wellness Program in your workplace.

KATRINA MILLS

Head of Partnerships [email protected]

KADY BLEND

Partnerships Account Manager

[email protected]

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Wisr (ASX: WZR) is Australia’s first neo-lender with a commitment to the financial wellness of all Australians, through providing a smarter, fairer and wiser collection of financial products and services. Wisr provides a unique financial wellness eco-system underpinned by consumer finance products, the Wisr App to help Australians pay down debt, WisrCredit.com.au the country’s only credit score comparison service, combined with content and other products that use technology to provide better outcomes for borrowers, investors and everyday Australians.

Financial wellness is about making sure you get a smarter, fairer deal. That’s why we’ve created WisrCredit, the first tool of its kind that compares information from Australia’s biggest credit reporting agencies, all in one place. It means you’ll know your creditworthiness before you apply for a loan or credit card. Your score can change over time so you’ll be able to see how the changes occur in relation to your behaviours over time. WisrCredit is just one of the tools, services and apps that Wisr is creating to deliver a fair way to financial wellness.For more information visit wisrcredit.com.au

Available for download on Google Play or the App Store.

Automatically pay down your debt whenever you spend… That’s Wisr. Wisr App is the best way to tackle your debt without having to think about it. It’s Australia’s first app that lets you round-up your digital spare change to help pay down your debt faster.

About Wisr Limited.

WISRCREDIT

WISR APP

wisr.com.au

1300 992 007

http://wisrcredit.com.auhttps://play.google.com/store/apps/details?id=com.wisr.financehttps://apps.apple.com/au/app/wisr/id1368389391http://wisr.com.au

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+61 2 8379 4008

ABN 80 004 661 205

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Financial wellness. · 2020. 6. 11. · Financial wellness support has a much longer lasting effect than other programs and it aligns well with the overall business strategy – keep