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Two in five UK workers suffer financial worries

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As many as 40% of employees have financial worries, which are impacting their work performance and wellbeing, according to a major study of British workers.

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Compared with their colleagues, those with financial worries are nearly eight times less likely to finish their daily tasks, and almost six times more likely to report troubled relationships with coworkers. Stress and feeling depressed were reported by 73% and 46% of this group respectively, compared with 21% and 9% among those with no financial worries. The report found that anxiety and panic attacks have a fourfold higher occurrence among working people with money troubles. Higher rates of absenteeism and lower rates of productivity result; these employees lose an average of 4.4 hours per week worrying about personal finances.

Sleepless nights were also reported nine times more frequently, while 41% of those with money worries admitted that their quality of work was affected by unease about the state of their finances. Almost a quarter (24%) admitted not finishing daily tasks as a result.

Financially fretful employees are also more than twice as likely to be looking for a new job, found the study of more than 10,000 UK employees commissioned by Salary Finance. Salary Finance has created a short video to demonstrate the impact of financial worries in the workplace. The overall impact on British business is estimated at £39-51 billion annually, equating to almost 2.4% of UK GDP. Workers in the telecoms sector are most likely to have financial worries, with 52% reporting concerns compared to a low of 31% for those in the oil and gas industry.

Gender differences 

Forty-three percent of women said they had money concerns, compared with 36% of men. Young people were more affected than older generations: 48% of 16-24 year-olds compared with only 20% of 55-64 year-olds. Across the UK, London workers proved to be the most financially stressed, with 46% affected, in contrast to the North of England where only 36% of respondents reported having money worries.

Surprisingly, the research showed little correlation between rates of pay and levels of financial worry, meaning that higher salaries don’t necessarily mean fewer money troubles. Forty-nine percent of those earning over £100,000 a year had money worries, compared with 40% of people overall. The study identified that how people spend, save and borrow are key to whether or not they have financial worries. Respondents were asked ten questions about their money habits, resulting in a financial fitness score from 1 (‘Not in Control’) to 5 (‘Financial Freedom’). Eighty-two percent of those with a score of 1 had money worries, versus only 8% of those with a score of 5.

Those scoring lower were more likely to run out of money before being paid, causing reliance on short-term, high-interest borrowing including payday loans. Over half (53%) of respondents scored ‘3’ or lower. A short video by Salary Finance shows what the different scores mean. Low levels of financial literacy also emerged, with ISAs, pensions and income protection ranking as the least well-understood financial products. Salary Finance has used this research to develop a Financial Fitness Improvement Toolkit for employers who want to improve the financial wellbeing of their employees, potentially saving up to 17% of their annual salary costs.

‘Financial unwellbeing’

Asesh Sarkar, CEO and co-founder of Salary Finance, said: “This research shows that personal money worries are having a real impact on employee wellbeing and performance, as well as business productivity. However, they also indicate that higher levels of financial literacy and access to responsible finance have the potential to improve the situation.

“In this groundbreaking study we have developed a Financial Fitness Score which is a quantifiable objective measure, and can act as a KPI. CEOs and HR professionals can use this to benchmark how they are performing versus their peer group. More importantly, this study identifies what employers can do to improve their fitness score KPI and reduce the cost of ‘financial unwellbeing’ in their business. “Employers are in a unique position to provide support on both fronts, through financial education, salary-deducted savings and loans, to help employees increase their financial fitness and ultimately get their finances in shape. The added dividend for businesses comes in the form of a healthier and more productive workforce.”

Across all sectors, 77% ‘trust their employer to keep their personal financial situation private from their colleagues and manager’, and 45% ‘would value a low-cost loan from their employer. Salary Finance partners with employers to offer employees a range of salary-linked benefits designed to help them get their finances in shape by improving financial wellbeing, saving money and borrowing responsibly.

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