Financial wellbeing and mental health | Why the conversation matters

To coincide with Mental Health Awareness Week, Charlie Pitt, head of our benefits consulting team shares his thoughts about the key role financial wellbeing plays as part of an individual’s overall mental health, and what employers can do to help.

During World Mental Health Awareness Week, wellbeing conversations often focus on emotional resilience, stress management, and psychological support. These are clearly important yet one of the biggest influences on a person’s mental health is something many people still find difficult to talk about openly: money.

Financial wellbeing and mental health are closely connected. When people feel uncertain or overwhelmed financially, it can have a significant impact on confidence, stress levels, sleep, relationships, and overall emotional wellbeing. Equally, when mental health is affected, everyday financial tasks can begin to feel harder to manage.

Recent FCA research highlights just how widespread financial vulnerability has become. One in four people in the UK are considered to have low financial resilience, meaning they are struggling to keep up with financial commitments, have missed payments, or do not have enough savings to manage unexpected challenges. The same research found that one in ten UK adults have no cash savings at all.

Financial wellbeing isn’t about the pursuit of wealth, rather the feeling of stability, control, and confidence in managing day-to-day finances and planning for the future.

When discussing financial stress and wellbeing three topics consistently come up in the financial clinics we host for the employees of our clients: budgeting, debt, and long-term savings.

These are not just financial challenges – they are emotional ones too.

Budgeting and the stress of day-to-day finances

For many people, the rising cost of living has made everyday budgeting increasingly difficult. When income feels stretched, even routine expenses can become a source of anxiety.

Budgeting is often viewed as restrictive, but in reality, it can be one of the most empowering steps towards improving financial wellbeing. Having visibility and structure around spending can reduce uncertainty and help individuals feel more in control.

Even small improvements can help reduce financial stress and create a greater sense of confidence.

Debt and emotional wellbeing

Debt is one of the most emotionally challenging financial topics people face. It can lead to feelings of shame, worry, guilt, or isolation, particularly when individuals feel they are managing it alone.

Avoiding financial difficulties often increases stress over time. Seeking support early can make a significant difference, both financially and emotionally.

Encouragingly, the FCA research also found that among the 1.7 million people in the UK who used debt advice or debt management services, 61% said their debts became more manageable afterwards.

Financial setbacks can and do happen to anyone. Open conversations and accessible support for all can help reduce stigma and encourage people to take positive action earlier.

The Importance of long-term savings

Long-term savings are another key contributor to financial wellbeing. While many people understandably focus on immediate financial pressures, future planning also plays an important role in reducing anxiety and creating peace of mind.

Savings do not need to begin with large amounts. Building financial resilience often starts with small, consistent steps.

However, research suggests many people still feel underprepared financially. A Royal London report found that one in five people in the UK have less than £100 in cash savings, while 69% of people do not know the value of their pension pots.

Improving education and confidence around savings products such as ISAs can help individuals feel more empowered about their future finances and reduce some of the uncertainty that contributes to financial stress.

Supporting healthier financial futures

Financial wellbeing should not be viewed separately from mental health. The two are deeply connected, influencing how people feel both at work and in their personal lives.

When individuals feel financially supported, they are often better able to focus, plan ahead, and engage positively with daily life. Conversely, prolonged financial stress can affect concentration, relationships, productivity, and emotional resilience.

That is why creating supportive work environments through financial wellbeing initiatives, or accessible financial education is so important for employees and employers alike.

Improving financial wellbeing is not about achieving perfection. It is about helping people feel informed, supported, and more confident in managing their financial lives.

During Mental Health Awareness Week, there is an opportunity to recognise that financial wellbeing is a vital part of overall mental health. By encouraging open conversations around money and providing practical support in areas such as budgeting, debt management, and long-term savings, we can help individuals build not only stronger finances, but healthier and more resilient futures as well.