By Marcus Leach

Employers in small to medium sized enterprises (SMEs) are being urged to act fast to improve financial literacy amongst staff for 2012 as household costs look set to increase with the impact of the recession continuing to bite.

Research from financial education provider Money in Mind found that only 18 per cent of adults consider themselves to be confident in managing their own finances with almost one in 10 admitting to taking time off work due to money worries.

This year, for the first time, stress was cited as the number one cause of long-term sickness absence according to a Chartered Institute of Personnel and Development (CIPD) survey, with money worries cited as a reason for this.

With small and medium-sized businesses, in particular, struggling to offer significant salary increases or bonuses it is vital employers look for alternative ways to ensure their workforce has financial security.

"Right now, financial capability is not a luxury; it's a necessity for employees and employers alike. Not only that, the financial security of individual employees is a key-stone on which to re-establish a strong economy," Martin Osborne-Shaw, Managing Director of Money in Mind said.

"At a time when many organisations cannot afford to reward their employees with cash helping individuals to reduce debt, boost their pension provision and protect their families from financial misfortune is a sound investment all round."

Nearly a third (29pc) of people surveyed said they would feel more effective and engaged at work if they received workplace financial education. Areas of most concern for employees were pensions, followed by ISAs, share options, mortgages and debt management.

More than two thirds (68pc) of employers said their organisation recognised that financial worries have an impact on employee performance, yet only 16pc currently have financial education provision available within the workplace. Almost one in five (19pc), however, is planning to implement a financial education programme in the future.

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