As the Christmas period draws to a close, research by Hastee Pay has found that this period has taken a toll on workers in UK and Ireland, with this workforce being five times more likely to use high-cost credit in January compared to December as workers are left to endure a five or six-week for their next payday.
Through this research, they also found that employees on a monthly pay cycle are twice as likely to use short-term credit in comparison to those paid weekly. Those who are paid monthly are also seven times more likely to use their overdraft in January rather than December. These findings suggest that more frequent access to pay has a positive impact on workers who would otherwise have to rely on borrowing and potentially fall into troubling debt.
James Herbet, CEO of Hastee Pay commented on these new findings, saying “What’s intended to be a wonderful time of the year can be financially crippling for so many hard-working people”
He continues to discuss that companies oblivious to these financial struggles may be responsible for this, saying, “It’s not that the spirit of Scrooge is alive and well in businesses today, it simply comes down to the fact that many companies aren’t fully aware of the financial strain experienced by workers across all salary bands. It’s not just Christmas that employers need to be aware of – January is arguably a more stressful time in terms of financial health as employers are unwittingly putting their staff under further strain by paying them in full earlier in December, therefore making them wait for up to 6 weeks for their next payday in January”
The study also found that 35% of workers say their finances leave them feeling anxious or stressed most of the time while 24% of UK workers have difficulty concentrating at work due to financial stress. More worryingly, 26% say financial stress leaves them feeling on the edge, mentally and physically.
The struggle to concentrate and feeling on the edge both mentally and physically are highest among younger workers (18-24) and those earning under £30,000. A previous Hastee Pay study* uncovered a direct link between financial stress in the workforce and poor business productivity impacting the bottom line.
Abigail Montrose, a Financial Capability manager at Royal London discusses these issues and has highlighted that they are constantly looking to address this, saying, “Four out of ten of us are unhappy with the way we manage our money, according to the Money Advice Service. We know that worrying about money can affect our physical and mental health. So as part of our wellbeing programme at Royal London, we have been looking at what we can do to improve the financial well-being of our employees.
She goes on to further discuss their programme, “Our financial wellbeing programme aims to help people improve their ability to manage their money on a day to day basis, to prepare for and manage life events and to cope during periods of financial difficulties.”
To balance their incomings with their outgoings, 48% of employees were said to have worked overtime to save money before the Christmas period and this is more of a requirement for those aged 18-24.
James ended by saying “Our research has revealed that this financial strain isn’t just focussed on Christmas and January, but throughout the year, as 87% of workers have had to cover unexpected costs in the last 12 months. Considering the links between financial wellbeing and workforce productivity, businesses offering flexible pay could also see a healthy impact on their bottom line.”
Hastee Pay Workplace Wellbeing Study 2018