Data shows that almost half of those working in Britain have financial worries (40%) and this is linked closely with stress and depression.
The research by Salary Finance, a financial wellbeing solutions provider, surveyed over 10,000 British workers. Of the group with financial worries, a huge 73% reported to suffer with stress, and 46% with depression. Overall the data showed stress levels were 380% higher and depression levels 490% higher than those who did not have financial worries.
And of those that earned more than £100,000 per annum, over half (55%) stated they suffered from anxiety and panic attacks, and 53% stated they suffered from depression.
Anxiety and panic attacks have a fourfold higher occurrence among working people with money troubles. Sleepless nights were also reported nine times more frequently, while 41% of those surveyed admitted that their quality of work was affected by unease about the state of their finances.
The data also revealed that the nation’s financial situation is a concern - with 18.6 million working people in the UK (53%) lacking financial resilience and 11 million regularly running out of money between paydays.
Asesh Sarkar, CEO at Salary Finance, said: “As April is National Stress Awareness Month, we wanted to further highlight the issue of financial stress and the impact this can have on people – particularly in the workplace. This added level of stress is something that employers need to address by removing the taboo of talking about money worries in the workplace.
“It is not a matter to be taken lightly, but interestingly is something that people are happy to share with their employers. In our research 77% of respondents said they trust their employer to treat their financial situation as confidential. This puts employers in a great position to really help their staff become more financially stable and therefore happier in their everyday lives.”
The findings also reflected on how this impacts people during the working day. The group with financial worries were shown as eight times less likely to finish their daily tasks, and almost six times more likely to report troubled relationships with co-workers.
They also take 1.5 days a year off work due to their financial stress and are more likely to be looking for a new job. This can have a great impact on employers in turn. A recent Harvard Kennedy School study reported that the cost of losing an employee is between 16-20% of annual salary.
The overall impact on British business is estimated at £39-51 billion annually, equating to almost 2.4% of UK GDP. This is greater than the budget for defence and more than half the education budget.
Asesh added: “We are passionate about the role that employers can play in helping staff get their finances in shape.
“Employers are in a unique position to provide support, through financial education, salary-deducted savings, advances and loans, to help employees increase their financial fitness and ultimately improve their financial wellbeing. The added dividend for businesses comes in the form of a happier, healthier and more productive workforce.”
(Source: Salary Finance)
In recent news the world witnessed Venezuela’s turmoiled path to hyperinflation. According to a recent report by the International Monetary Fund, Venezuelan citizens have been experiencing price hikes on consumer items of 200% week to week, and that’s just things like coffee and bread.
Behind the cause of Venezuela’s inflation is rumoured to be corrupt politics, price-fixing and social unrest, but much of the capital crisis began with rising prices of raw materials and a large reliance on imports for day to day living. Since 2015, an estimated 1.6 million people have left the country making themselves economic refugees elsewhere.
However, before we can understand how Venezuela, once a country with one of the strongest economies in South America, came to bust a 3-month annualized inflation rate of over 1,200,000%, we should learn about inflation and how it works.
Inflation is often considered the pinnacle of modern economics, but it’s not just a modern phenomenon. It goes way back, and has impacted exchanges, banking and commerce for hundreds of years. Today, inflation primarily influences interest rates, including but not limited to mortgages, pensions, payments, accounts, and all in all, the price of goods and services. On the back of all these, inflation also impacts investors.
In fact, inflation could be described simply put as the rate at which the price of things increases. The opposite is deflation, the rate at which the price of things decreases.
Inflation is usually measured and discussed according to two systems: The Consumer Prices Index (CPI) and the Retail Prices Index (RPI). These change according to data on how much stuff costs, how much people spend and how much something is valued, over time. The percentage figure shown by the measured CPI, i.e. 1.5%, means that goods and services are costing 1.5% more than the previous year. In theory, CPI should fluctuate according to supply and demand and therefore inflation occurs quite naturally in most countries, like the US and the UK, while in countries like Venezuela, the equation is littered with impacting factors that are difficult to even make sense of.
CPI figures in the UK are measured up to at least three decimal places and reported rounded up to a single decimal place. In Venezuela, they are far from reporting CPI in decimal round-ups, and perhaps they may never again. Once the fast-paced acceleration towards hyperinflation occurs, it’s very difficult to come back. Two famous examples of similar hyperinflation that have occurred are 1920s Germany and 2008 Zimbabwe, and in the latter case the solution was a complete overhaul of the African nation’s currency and dollarization of its economy.
The natural turnaround of inflation is that when the prices of items increase, the value of the currency buying the items decreases. For example, if I bought a cup of coffee for £1.50 last year, and this year it cost me £1.55, then for the same cup of coffee, I’ve had to spend more money, which on the flip side means my money is worth less; it’s worth less cups of coffee.
This video explains it well.
If we take a look at the changing prices of a cup of coffee in the UK compared with Venezuela, over the last four or so years, it may look something like this:
Since Venezuela's established position as a leading economy in South America, it has come a long way in doing bad trade. Prices of daily used items and household groceries have been coupling MoM. The main reasons behind this are a, shortages in state manufactured and produced goods, and b, a shortage of imported goods due to poor international relations. Within this equation is oil, which forms a majority stake in Venezuela’s export economy and a greater part of its GDP, given that Venezuela is home to some of the biggest oil reserves in the world. A slowdown in oil production since Maduro’s government came to power, mainly due to a lack of historical investment in the sector compared with the rest of the world’s oil markets, consequently resulted in a 45% reduction in GDP since 2013.
Pre-2013, Chavez was in power, and managed to keep the country’s economy afloat via oil revenues, but when he died of cancer in 2013, Maduro came to power and when global oil prices crashed, he failed to maintain stability. He ordered money to be printed to pay employees and continued to dispense state welfare. He then proceeded to control the price of household groceries, like flour, eggs and cooking oil. As CPI figures increased, the value of the Bolivar decreased, making foreign imports even harder. These events, combined with a collapse of import trade, led to the current hyperinflation that exists today. Further scarcities in food and medicine have also created hostile local environments, with protests and riots taking place across the country.
At this point, having depleted the state’s foreign exchange reserves, nation’s like Russia and China are no longer willing to help. Venezuela also cut off ties with the IMF in 2007, and the chances of a current bailout are slim. Although reports indicate Venezuela is on route to hit the 1 million percent inflation mark this year, according to the BBC, Venezuelan officials plan to resolve the country’s current economic anguish with very unorthodox methods. Nicolas Maduro’s government introduced a new digital currency, launching an Initial Coin Offering (ICO) for Petro this year. Serious doubt surround this move, as it is widely agreed the Petro is simply smoke and mirrors, with no real value. On the other hand, the government claims it raised $735m with the ICO, mostly backed by oil. The aim is to circumvent US and other countries’ economic sanctions, originally put in place due to political squabbles, and open the country up to international investment. They also intend to turn things around by introducing urban chicken and rabbit farming…
Sources: https://nationalpost.com/news/world/an-estimated-1-6-million-people-have-fled-venezuela-since-2015-thats-five-per-cent-of-its-population https://www.finance-monthly.com/2018/03/the-pound-vs-inflation-and-how-this-impacts-investors-today/ https://www.forbes.com/sites/garthfriesen/2018/08/07/the-path-to-hyperinflation-what-happened-to-venezuela/#6b96ff9915e4 https://www.bbc.co.uk/news/uk-45652921 https://www.bbc.co.uk/news/business-12196322 https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic https://www.forbes.com/sites/stevehanke/2017/10/28/zimbabwe-hyperinflates-again-entering-the-record-books-for-a-second-time-in-less-than-a-decade/#776634f03eed https://www.livemint.com/Opinion/7gNrvecy9QlyFrJYmZfiiL/The-how-and-why-of-the-Venezuelan-crisis.html
Dubai is now the number one city for graduates seeking a career in financial services, whilst London doesn’t make the top ten, reveals a survey by one of the world’s largest independent financial advisory organisations.
In an annual poll, deVere Group asks those who start its flagship Graduate Programme, in which location within the Group’s global network of more than 70 offices they would like to start their international financial services career.
This year, 28% said their first choice would be Dubai. The second most popular was Barcelona (22%); third is Hong Kong (17%); fourth is New York (14%); and fifth is Cape Town (8%).
The remaining 11% is made up of other destinations including Shanghai, Sydney, Geneva, Paris, Bangkok and Abu Dhabi.
deVere Group founder and CEO, Nigel Green, comments: “This survey highlights that the next generation of financial services professionals are open to look beyond the traditional and more established global financial hubs.
“It underscores how cities like Dubai, Barcelona and Cape Town are increasingly important international financial centres and compete with the stalwarts such as Hong Kong and New York.
“With this, as the apparent perception of the wealth mangers and advisers of the future, we can expect this trend to continue for the foreseeable future.”
He continues: “The fact that Barcelona this year is second-placed and London – currently the world’s most important global financial hub – does not make the top ten is interesting.
“Could it be that the respondents believe mainland Europe’s international financial centres offer more opportunities than post-Brexit London?”
Mr Green goes on to say: “These global hubs of finance, trade and commerce represent destinations of incredible possibilities for ambitious grads wanting to embark on careers as wealth professionals.
“There are some shared characteristics amongst these top five cities. These include that English is commonly spoken, they are politically and economically stable and there is a high level of high net worth individuals.
“But these destinations are also quite different from each other in terms of the lifestyle they offer and in terms of clients’ expectations, economic environments and regulatory conditions.
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“With each of the top five cities offering unique opportunities and challenges, each one attracts grads who have often quite markedly different strengths and weaknesses, skill sets and aspirations.”
The 18-month deVere Group Graduate Programme’s training begins at the Malta administration and support office, and graduates are then given the choice to attend an international deVere Academy, before full-time relocation when they actively start their careers.
The deVere CEO concludes: “deVere graduates don’t just witness our client-focused, values-driven, attention-to-detail culture from their side-lines – they’re an integral part of it.
“We like them to share their own personalities and perspectives, because together with our continual training and mentoring, it will allow them to become better financial advisers.”
(Source: deVere Group)
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