Life insurer TAL says a study it commissioned has found a strong correlation between financial literacy and financial stress, indicating there is a role for employers to play in helping employees who are worried about their finances. 

The study, based on responses from 800 participants who are employed and have a super account, revealed one in four are currently experiencing a high level of financial stress. 

About 28% say their financial situation has negatively impacted their mental health, and 21% say it has negatively impacted their physical health. 

The figures increased sharply for respondents who say they are facing high financial stress. Around 70% say their mental health has suffered and 57% say their physical health has deteriorated. 

“Financial stress can lead to employees becoming seriously ill or injured, which not only impacts the employees’ health, but can also have profound impacts for employers,” the TAL study says. 

“Employees under high financial stress are far more likely to be using work time to take care of their personal financial issues.” 

About 41% currently experiencing a high level of financial stress say they take time out of work to deal with personal finances compared to 21% with low financial stress. 

The study says productivity losses, absenteeism and expenses from work-related injuries or illnesses cost the Australian economy around $28.6 billion each year, hindering wage growth and the creation of additional jobs. 

“As well as physical illnesses and injuries, this includes mental health conditions exacerbated by factors such as financial stress.” 

About 82% of respondents believe they would benefit from having access to financial education and tools, regardless of how confident they feel about the future. However, just 15% have been offered these by their employer. 

TAL says in the current economic environment Australians are looking for help to manage the rising cost of living, and corresponding financial stress levels. 

“The research shows they are looking to employers as a key source for that help. Similarly, employers are looking to their partners, like superannuation funds and banks, to help them educate and support their employees,” the life insurer says. 

Click here to access the paper.