Feeling Financially Safe

Universal Basic Income: Would It Make Us Happier? In this episode, David Lloyd is joined by Chris Budd and Tom Morris to explore this hotly debated idea, UBI, but through a financial wellbeing lens rather than a political one.

Along the way, there’s community joy, reused tea bags, Maslow’s pyramid, behavioural psychology and what all of this might mean for parents supporting their children, as well as those approaching retirement.

Welcomes and Introductions

Chris Budd – Founder of Ovation Finance, author of The Four Cornerstones of Financial Wellbeing, trustee of a hospice and, as someone else once described him, the “grandfather of financial wellbeing.”

Tom Morris – Managing Director of Ovation Finance. Award winning, Bristol-based, chartered, B-Corp certified and employee-owned.

Fancy a chat with Tom Morris and the team at Ovation? Contact details here

Tight Ass Tommo

Tom’s money-saving tip this week involves former England cricketer Jack Russell. Rumour has it he would hang up his tea bags between uses and reuse them later.

Whether for sustainability or savings, the lesson is clear: small habits can save money. (Although David points out his mum was doing this decades ago.)

Chris’ Good News

Before diving into economics, the team share their regular feature: Joy Baiting – the antidote to online “rage bait.”

Tom shares a story from a local mini rugby festival: 500+ children aged 6–12, countless volunteers organising parking, food stalls, refereeing and coaching — all creating a joyful community event.

This Episode

So… What Is Universal Basic Income? In this episode we look at a non-political Exploration.

Universal Basic Income (UBI) is the idea that every adult receives a fixed income from the government, regardless of their circumstances.

It’s:

• Not means-tested
• Not dependent on employment
• The same amount for everyone
• Simple in theory to administer

Importantly, the discussion here is not about politics or affordability – but about what UBI tells us about the relationship between money and happiness.

For context, if the UK paid everyone roughly £400 per month, it would cost around £200 billion a year — more than the NHS budget.

So yes, it’s expensive. But what about the wellbeing implications?

Maslow’s Hierarchy and Financial Security

Maslow’s hierarchy of needs suggests we must satisfy basic needs — food, shelter, safety — before we can pursue higher goals like belonging, esteem and creativity.

If someone is anxious about survival, it’s extremely difficult for them to move “up the pyramid.”
Financial planners see this constantly – particularly with people approaching retirement. Until clients feel secure, they struggle to explore purpose or joy.

So the question becomes:

Would guaranteeing a basic income help people move up Maslow’s pyramid – or make them lazy?

Does Financial Stress Motivate – or Paralyse?

There are two competing views:

• View 1: Financial pressure motivates people to work harder.
• View 2: Financial pressure creates anxiety that paralyses people.

To explore this, Chris consulted behavioural finance expert Neil Bage, who pointed him to the Yerkes-Dodson Law.

The Yerkes-Dodson Law

A little anxiety improves performance.
Too much anxiety harms performance.

Financial stress often sits firmly in the “too much” category. When people are overwhelmed by money worries:

• Their mental capacity shrinks
• They focus only on short-term survival
• Decision-making deteriorates

Research shows that when people worry about paying bills, cognitive performance drops significantly.

Real-World Examples

David shares two personal examples:

• As an actor, nerves enhanced performance.
• As a novice pianist recording an exam, anxiety completely undermines it.

The difference? Confidence and perceived control.

Similarly, financial anxiety can either sharpen focus – or overwhelm entirely.

Chris recounts how severe financial stress led his father to stop opening bills altogether — anxiety became paralysing rather than motivating.

What Does the Research Say About UBI?

Several trials have been conducted:

Canada (1970s)

• Reduced mental health diagnoses
• Very few people stopped working
• Those who did were mainly new mothers and teenagers choosing to study

Finland (2017–2018)

• 2,000 unemployed people received ~£500 per month
• No obligation to work
• Improved wellbeing
• Reduced mental strain
• Some started businesses or provided family care
• Overall economic impact: minimal

Ongoing UK and Welsh trials

Still awaiting results.

So… Does It Work?

From a wellbeing perspective: yes.

UBI appears to:

• Reduce anxiety
• Improve mental clarity
• Improve wellbeing
• Enable better decision-making

From a purely economic perspective:
There’s no strong evidence yet of significant economic growth benefits.

Why Isn’t It Implemented?

• It’s politically divisive.
• It’s extremely expensive.
• It would require dismantling and rebuilding the welfare system.
• Some argue it should be means-tested rather than universal.

But the economic arguments may be missing a key point:

The wellbeing benefits are significant.

A Lesson for Financial Planning

Financial planners often help clients answer:
“How much is enough?”

But perhaps they should also help answer:
“What’s the minimum we need to avoid falling into anxiety?”

Final Thoughts

Universal Basic Income may or may not be politically viable. But the psychology is clear:

A guaranteed level of financial security reduces anxiety and increases wellbeing.

And that principle applies whether you’re:

• Designing public policy
• Supporting your children
• Or planning your own financial future

 

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Episode Transcript;

Introductions

David Lloyd:
I’m David Lloyd, the person who knows very little about money, but perhaps a little bit about life. I try to tease great nuggets of wisdom from my two co-presenters, Chris Budd and Tom Morris.

Chris, would you like to briefly tell us a bit about yourself?

Chris Budd:
I love the stress on briefly, David. Thank you. I’m Chris Budd, apparently the grandfather of financial wellbeing. It now says so on my business card. I’m a financial planner, founder of Ovation Finance, sponsors of this podcast, and author of The Four Cornerstones of Financial Wellbeing and three novels. I’m also a trustee of a hospice and do a few other bits and pieces.

David Lloyd:
I should add that someone else described you as grandfather of financial wellbeing. You are not that arrogant.

Tom Morris:
And that voice came from the toy boy of financial wellbeing. I’m Tom Morris, award winning toy boy of financial wellbeing. Managing Director of Ovation Finance. We are a Chartered Financial Planning firm based in Bristol. We are B Corp certified and employee owned. We recently celebrated our 25th anniversary and we try to bring the ideas we discuss on this podcast into the way we work with clients.

David Lloyd:
And from my perspective as one of your clients, you do that very successfully. Right, that’s enough mutual back slapping.

Joy Baiting

David Lloyd:
Before we get into today’s topic, we have our new feature, joy baiting. A positive antidote to rage bait. Tom, what have you got for us?

Tom Morris:
I recently went to a minis rugby festival. That’s six to twelve year olds from several local clubs coming together for friendly tournaments. There were over 500 children and their families there. Volunteers running car parking, food stalls, raffles, refereeing matches. Coaches helping young people learn a sport built on values.

I stood there looking around at all these families enjoying themselves and thought, there is so much good going on in the world. People giving up their time to create community.

Chris Budd:
Community wellbeing is one of the key areas of wellbeing identified in research by Gallup. What you described fits that perfectly.

David Lloyd:
And as Desmond Tutu said, joy is the reward for the giving of joy.

Tight Ass Tommo

David Lloyd:
Now to Titus Tomo, where Tom shares a money saving tip.

Tom Morris:
This week is inspired by former England cricketer Jack Russell. Apparently, he used to hang up his tea bags between sessions and reuse them later.

Whether that was sustainability or savings, who knows. But imagine the savings if you reused your tea bags.

David Lloyd:
My mum used to do that when tea bags first came in.

Chris Budd:
He also wore the same floppy white hat throughout his cricket career, patching it so many times it was hard to tell what was original.

Main Topic: Universal Basic Income

David Lloyd:
Chris, what are we talking about today?

Chris Budd:
Universal Basic Income. And I want to stress we are looking at this in a non political way. The idea of government giving money to people can be emotive. Some think it encourages laziness. Others see it as support. We are not debating politics. We are exploring what it tells us about the relationship between money and happiness.

David Lloyd:
My understanding is that Universal Basic Income proposes every adult receives a set level of income to cover basic needs.

Chris Budd:
Yes. Everyone gets the same amount. No means testing. No conditions. It is simple in theory. The question is, what does psychology say about its impact?

Maslow and Security

David Lloyd:
Maslow’s hierarchy of needs feels like a good place to start.

Chris Budd:
Maslow described a pyramid of needs. At the bottom are food, shelter and security. Above that come belonging, esteem and self actualisation. His argument was that it is hard to focus on higher level needs without first satisfying basic ones.

We see this with clients. If someone does not feel financially secure, it is very hard for them to think about purpose or joy.

Tom Morris:
Especially around retirement. People need to see where their income is coming from before they can relax into the next stage.

Does Financial Stress Motivate?

David Lloyd:
Some argue financial pressure motivates people. Others say it paralyses them.

Chris Budd:
Behavioural finance expert Neil Bage pointed me to the Yerkes Dodson law. A little anxiety sharpens performance. Too much inhibits it.

Financial stress is often in the too much zone. Research shows when people worry about paying bills, their mental capacity shrinks. They focus only on short term survival.

David Lloyd:
I’ve experienced that. As an actor, nerves helped. As a pianist sitting an exam, anxiety overwhelms me.

Chris Budd:
Exactly. The tipping point varies from person to person.

Evidence from Trials

Tom Morris:
There was a Canadian trial in the 1970s that showed reduced mental health diagnoses when people received guaranteed payments. Very few stopped working.

A Finnish trial in 2017 gave unemployed people around £500 a month. Wellbeing improved. Mental strain reduced. Some started businesses or cared for family. The economic impact was neutral.

Chris Budd:
Across trials, the consistent finding is improved wellbeing, even if economic growth does not significantly increase.

Practical Implications

David Lloyd:
So what can we learn from this?

Chris Budd:
The key lesson is that having a guaranteed financial floor reduces anxiety and improves decision making.

For parents supporting children leaving home, perhaps provide enough to cover essentials but not luxuries. Remove anxiety, keep motivation.

Tom Morris:
And for financial planners, perhaps we should focus not just on how much is enough, but what the minimum secure level is. That safety net can transform confidence.

Conclusion

David Lloyd:
Universal Basic Income may be politically complex and expensive. But psychologically, the message is clear. Financial security reduces anxiety and improves wellbeing.

Thank you to Chris and Tom. Thank you to producer Tammy. And thank you to everyone listening. We look forward to bringing you another episode soon.

 

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