A third of UK workers are living payday to payday
LONDON, 27 June 2022 – A third of UK workers (36%) are living month-to-month without any spare cash for emergencies or shocks, with a quarter (26%) struggling financially, according to WTW’s Financial Wellbeing study of over 4,000 UK employees*.
Although the research shows that the financial wellbeing of employees overall has not altered significantly since before the Covid-19 pandemic, it does reveal that 44% of employees have suffered some kind of financial shock in the last two years, such as a cut in hours, significant medical expenses or being a victim of fraud.
The repercussions of financial shocks can have a wider impact on peoples’ financial health and can undermine long-term financial security. For those who have suffered a financial shock, around a third were unable to pay their mortgage, rent or utility bills (34%); expecting to retire later than they anticipated a year ago (33%); or took a salary advance (29%). In addition, the research found links between finances and mental health as those struggling financially are three times more likely to suffer anxiety or depression (68%) than those who are financially unworried.
Stewart Patterson, Director for LifeSight, WTW’s DC master trust, said: “It’s clear that for many workers, despite being in full-time paid employment, meeting day-to-day financial demands is a challenge. High levels of inflation mean that the cost of living has been rising, and this is only likely to continue over the course of the year. This can put pressure on people’s personal lives, which in turn can affect their performance at work, as well as their mental and physical health.
“We know that financial problems are strongly connected to other issues including anxiety, health problems, loneliness and lower performance at work, and so many employers are looking at ways to ease the burden on their employees. This can include tools and suppprt designed to help with budgeting and financial planning, as well as flexible ways in which employee benefit budgets can be used to help those struggling in the short term.”
In response to their financial challenges, many employees are looking to their employer to help them manage their financial wellbeing. Two in five (42%) employees think that financial apps and tools should be a core part of employee benefits and 39% say they trust financial apps, tools and advisers that are suggested by their employer more than those they can find on their own. Indeed, over half (52%) of financial struggling employees think the resources and initiatives provided by their employer have helped to improve their financial situation.
Patterson said: “There is greater appreciation from employees with financial difficulties that their employer recognises the financial challenges faced by some in the workforce and the impact this can have, and that employers are trying to provide help in this area. The use of financial wellbeing apps, tools and support can provide real help for employees that need it the most.”
Other notable findings from the Financial Wellbeing research include:
- Perhaps unsurprisingly, it is the older workers of the ‘Boomer’ generation who are most likely to have high financial wellbeing (77%) and the youngest workers, ‘Gen Z’, who are the least likely (28%).
- The research also shows a link between financial problems and employees’ lifestyle behaviours. For example, those living payday to payday are twice as likely to smoke (31%), have poor eating habits (37%) and drink too much alcohol (26%), and are 10 times more likely to substance abuse (19%) than those not living payday to payday.
Notes to editors
*WTW’s Financial Wellbeing research is part of the Global Benefits Attitudes Study, a survey of 35,500 employees working for medium or large private sector employers in 23 countries, including 4,129 UK employees. The survey data was collected in January 2022.
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Jamie Kilduff: +44 (0)20 7170 3746 | email@example.com