‘How can the issue of economic abuse not come up when talking about wellbeing in the context of the cost of living crisis?’
This was the question running through a leading wellbeing consultant’s head when attending a meeting recently with a large corporation regarding financial wellbeing, in light of the current economic climate.
Incredulous, and testament to her own courage, she brought it up.
What has economic abuse got to do with employers anyway?
Every other member of the advisory board of the large corporation then looked at her with similar incredulity, but with a different question: what has THAT got to do with us as employers?
Unfortunately this response from employers is, according to our anecdotal research, very common. Many businesses just don’t get how financial abuse is relevant to their employees and how much the cost of living crisis is exacerbating this type of abuse.
The Government has recognised the ‘abhorrence’ of economic abuse and that staff and victims need more help
Fortunately, though, the Government is bringing this important issue to light with civil servants recently being given new guidance to help frontline staff support people vulnerable to economic abuse. Minister for the Cabinet Office, Jeremy Quin, said when launching the new toolkit: “Economic abuse is an abhorrent crime and we are determined to use all levers of government to stamp it out.”
When it comes to employers, what is also common is their disconnect regarding domestic abuse (which, for the vast majority of cases, includes economic abuse, with 95% of sufferers saying their experience includes this). While 86% of employers believe they have a duty of care towards victims, only 5% have introduced a specific policy, or guideline on the issue.
Most employers are disconnected and failing to deal with this issue
Having said that, there is a handful of progressive, convention-challenging employers which believe it’s more than employers’ business if their employees (or indeed customers) are suffering economic abuse. They believe it’s a question of duty of care, standing up for basic human rights, as well as fighting for gender equality. These trailblazers are on a mission to raise awareness industry-wide of the serious and potentially fatal issue; that’s before you even consider the impact on business, like productivity and psychological safety.
Lloyds Banking Group is one such employer. We’ll be posting a case study highlighting their work around this on www.makeadifference.media soon.
Do you actually know what economic abuse is?
But before we go on – let’s be clear about what we’re talking about, as there is a subtle difference between economic and financial abuse. Charity Surviving Economic Abuse (SEA) defines financial abuse as ‘controlling finances, stealing money or coercing someone into debt’. Economic abuse is broader than this and is a legally recognised form of domestic abuse, included in the Domestic Abuse Act. According to SEA, it includes financial abuse but also controlling other resources such as housing, food, transport and employment.
Both forms of abuse rocketed in the Covid pandemic, with many victims feeling trapped at home with their abuser, and both are rising in the current cost of living crisis. For instance, according to Google, searches for ‘financial abuse signs’ have increased by 43% in the UK, with around 1000 searches in the last month. During the pandemic, SEA saw its website traffic increase by 85%.
Financial and economic abuse soared in pandemic and continue to rise
Law firms, such as domestic abuse specialists Rayden Solicitors are also reporting a rise in the number of financial abuse enquiries, with a 77% jump in visits to its resources on recognising financial abuse, in the last two years.
The crisis means that there’s been a huge rise in individual debts, too, with survivors of economic abuse reporting a personal average debt of £20,000, six times greater than in 2020. Not only that, women are reporting that it’s now harder because of lack of funds to leave controlling, abusive and violent situations. Women’s Aid research shows that 96% of victims say the crisis is worsening their abuse and 73% are scared to leave their abusers due to money worries.
Rise in debt is feeding into abuse crisis too
The UK’s largest personal insolvency provider, Creditfix, also confirms a worrying surge in numbers, seeing an increase in people reporting financial abuse when seeking debt advice:
“People being left with debts they didn’t personally choose to accumulate can have a devastating impact on their lives, and with the cost-of-living crisis the outcomes could become much more dangerous,” says Layla Johnson, regional manager at Creditfix. “With more people struggling to afford utility bills, rent, mortgages and food, debt and money worries can have a huge impact on an individual’s mental health and overall productivity. Economic abuse takes this to the next level.”
Economic abuse can happen to anyone, regardless of socioeconomic background
Lloyds’s group sustainable business director, Fiona Cannon OBE has been leading the charge on raising awareness of domestic abuse and, increasingly, economic abuse (to learn more about how Lloyds is tackling economic abuse, see this case study article here). She says it’s been a steep learning curve and, sometimes, a shock: “The biggest learning for me personally is that I didn’t have a concept before of how widespread this is as an issue. It can happen to anyone at any time.”
There’s long been a stigmatised stereotype that domestic/economic abuse victims are from poorer households but, according to charity Refuge’s report on economic abuse, this is a myth and it occurs across all socio-economic backgrounds “at broadly even rates” (ref: Economic Abuse Report 2020).
Up to 39% of adults could be experiencing economic abuse right now
As already mentioned, it’s estimated that 95% of those experiencing domestic abuse suffer economic abuse too. But, because awareness of economic abuse is currently low, Refuge’s research also shows that it is potentially much more prevalent than previously thought, with at least 16% and up to 39% of adults in the UK having experienced behaviours which suggest economic abuse.
Truly gauging how many people, and from what backgrounds, are prone to suffering from economic abuse is particularly challenging, not only because awareness is so low, but because different people answer survey questions differently. For instance, Refuge found that while women were only slightly more likely than men to report experiencing economic abuse (17% compared to 16%), when qualitative answers were analysed a new picture emerged.
Women and men differ in what they see as economic abuse with men focusing on the ‘frivolous’
Men often gave examples describing non-abusive behaviours like ‘frivolous spending’, whereas women were more likely to detail significant economic abuse such as ‘prevents me from getting a job’. The report concludes that this could suggest that men and women are conceptualising economic abuse differently, but more research is needed.
With the cost of living crisis biting hard, there is no better time to help than the present and no better time for employers to tackle this topic with urgency. Read: if you haven’t already, get those domestic abuse policies written. And, more importantly, put them into action.
Employers must act now as crisis bites; avoiding is not good enough
“There’s a massive issue here in terms of employers not understanding the scale of this problem. And there are huge challenges in starting the conversation,” says Louise Aston, wellbeing director, BITC. “We know that, as a nation, talking about money is the biggest elephant in the room. But avoiding the conversation is not good enough: society and employers must get better at recognising non-physical abuse and trauma, such as psychological, verbal and, especially now, economic.”
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