Research is emerging showing a link between financial advice and good mental health. Stuart McCulloch, our Senior Executive Officer – Middle East, explores how taking control of your finances can benefit more than just your bank balance.
It’s long been assumed that taking control of your life, including your finances, offers better peace of mind. And new research has confirmed that choosing to seek regular financial advice is fundamentally linked to good mental health and wellbeing.
The report, commissioned by HSBC Life, asked thousands of adults about their approach to financial planning, and how it impacts their wellbeing. The results confirmed that almost three quarters of UK adults who have taken regulated financial advice are more likely to have average or above-average mental health.
For those who haven’t prioritised their finances by seeking advice, 42% reported that their mental health has slipped below average.
The same is also true for those who choose to manage their finances on an ongoing basis. Of this group, similar outcomes were identified; nearly three quarters who reviewed their financial plans annually reported they had average or above-average mental health. Yet half of those with no financial plan stated they had below-average mental health.
When it comes to retirement planning, the same trends were seen again – 77% of those with plans had average or above-average mental health, whilst 48% of those without a plan reported that their mental state was below average.
And across the financial planning sector there’s also been something of an acknowledgment about how good financial planning can positively impact mental health. Earlier this year, the Association of British Insurers’ introduced new mental health principles, with its 5,000 advisers and staff trained on mental health issues. And as part of its response to the pandemic, the Personal Finance Society has recommended that the financial sector prioritise both employee and client mental health.
At The Fry Group, we believe good planning and the concept of financial freedom (and consequently mental health and wellbeing) go hand in hand. We have our own team of trained Mental Health First Aiders who help us promote wellbeing in the workplace. And for our clients, we understand that it’s important to determine what financial freedom means, before helping set up a financial plan to help achieve it. As well as focusing on any goals which are important to you, we’re also here to help tackle any financial concerns which may be worrying you, including whether you are saving enough for later years, or to provide for your children or other beneficiaries. Working through these financial worries, as well as setting goals, is an important step in achieving real peace of mind.
We are also working to help improve financial literacy amongst groups that are most in need. There is a clear link between a lack of financial education and the impact on life opportunities so we’re taking steps – through the use of our resources, expertise and networks – to help people in marginalised communities.
To discuss any aspect of your own financial planning in more detail please contact your nearest office.