The research showed that 25 million UK employees are affected by money worries while at work. Additionally, two in five (40%) employees worry about their finances always or often.
Financial concerns were highest among the younger generations, with 87% of Millennials reporting that money worries affect them while they’re at work. This fell to 72% among those aged 35 to 54, while those aged 55 and above suffer the least, although 47% of this cohort are still affected.
The research looked at seven areas of personal finance including budgeting and planning, debt, income protection, savings and investments, retirement planning, properties and mortgages, and tax. The lowest-scoring areas, which dragged down the overall index score, were income protection (42.5), budgeting and planning (48.8), and tax (48.5).
More than a third (34%) of employees said they are unprepared for unexpected financial costs or a loss of income. While the third-biggest money worry was coping financially if they lost their job, less than one in 10 (8%) employees said they have purchased an income protection product.
More than half (55%) do not have any sort of financial plan, and three-quarters (76%) either don’t know what tax allowances and reliefs are available to them, or have some awareness but are not sure if they are taking full advantage of them.
The survey results were slightly more positive when it came to debt. Forty-two per cent said that debt is not an issue for them and 59% of employees are confident in knowing where to get help or advice if they have debt issues. However, 12% still said debt is a significant issue.
The research also surveyed employers about their approaches and attitudes towards employees’ financial wellbeing. It found that employers understand their businesses are suffering as a consequence of employees’ money worries, with around nine in 10 (89%) larger UK businesses (equating to 2.4 million) affected by poor employee financial wellbeing.
Organisations are feeling the strain of poor employee financial wellbeing on multiple fronts including: reduced productivity (22%), loss of talent (22%), higher short-term and long-term absences (both 19%), reduction in retirees (17%), and higher healthcare costs (13%).
However, steps are being taken to tackle the issue, with 45% of employers currently providing some workplace financial wellbeing strategies. The top five benefits that employees are offered to help improve their financial wellbeing are: discount vouchers for lifestyle expenditure (17%), financial advice (13%, although only 6% funded/part-funded by the employer), retirement seminars (12%), employee assistance programmes (12%), and workplace loans (6%).
Jeanette Makings, head of financial education services at Close Brothers, said the consequences of poor financial wellbeing are too important to ignore. “Money worries don’t just affect an individual’s financial health; they are one of the single biggest causes of stress, affecting mental and physical health if left unchecked. They are also an issue for businesses with lower productivity, higher absenteeism and higher staff costs, which hurts business performance. Doing nothing is no longer an option,” she said.
“Employers are well-placed to play a significant role in making a difference to the UK’s financial health. Their rewards and benefits help fund employees’ lifestyles; employers can reach large numbers of people with communications that are trusted; and employers can procure benefits and financial education, advice and investment solutions to help their employees improve their financial wellbeing. Yet despite the growing awareness of the need for workplace financial wellbeing, organisations seem to be struggling to find clarity, transparency, and meaningful measurement on this issue."
Cary Cooper, professor of organisational psychology at Alliance Manchester Business School, added that financial wellbeing has not been given the same attention as mental wellbeing.
“As wages have not kept up with inflation, the cost of living rises, and the elimination of the final salary pensions, many more people are worrying about their finances. Although many businesses have made great strides to look after the mental wellbeing of their employees over the past decade not as many employers have supported their financial wellbeing. And given that employees have said their money worries are affecting them at work this is a bottom-line issue,” he said.
“Providing advice and support for employees on their personal financial issues is not only the right thing to do, but can also deliver enhanced performance at work by taking away the money worries that can be a distraction."
Opinium carried out the research on behalf of Close Brothers Asset Management, surveying 1,003 employers with 200 or more employees, and 5,003 employees from companies with 200 or more employees.