The proportion living payday to payday increased by generation, with 20% of Baby Boomers living this way, 38% of Gen X, 47% of Gen Y, and 56% of Gen Z.
The number of employees struggling financially also increased on a sliding scale of salary, with 27% of those earning £65,000 or more living hand to mouth, 30% who earn between £35,000 and £64,999, and 47% earning less than £35,000. The report suggested that financial difficulty is therefore more than just a matter of income.
While general saving topped the list of employee priorities at 52%, 40% of respondents said they had a lack of emergency savings and couldn’t or probably couldn’t raise £2,500 if an unexpected bill came up in the next month.
Better management of spending was the second-highest priority (42%), debt repayment was third (38%), fourth was housing payments (37%), and fifth was other major expenditures such as a car, furniture or home improvement (34%).
Nearly a third (29%) also reported having financial problems that are negatively affecting their lives, with stark differences between those struggling financially and those not.
Fifty-nine per cent of people living pay cheque to pay cheque said their debt affects their quality of life, compared to 9% of those not living pay cheque to pay cheque. Similarly, 36% said money concerns stop them from doing their best job, compared to 8% of those not living hand to mouth.
The study found that employers’ role in helping employees manage their finances is increasingly important, particularly among younger workers.
Half of the employees surveyed think that their employer should be providing tools to help improve their finances, particularly among Gen Y (59%) and Gen Z (66%) compared to Baby Boomers (37%).
But when asked if their employers provide access to resources to support financial wellbeing 63% said they had no access, 29% some access, and just 8% reported having high access.
Richard Sweetman, a senior consultant and UK financial wellbeing lead at Willis Towers Watson, said: “Employers have an increasingly important role in helping employees to manage their finances, by providing tools and access to suitable products and services.”
“The trust that certain groups of employees have in their employer should provide encouragement for further progress in this area. However, employers should still be sensitive to the fact that there are other groups that will find their involvement in personal finance matters intrusive,” added Sweetman.
The report suggested using social networks and community groups to support employees, encouraging communication and alignment over spending within households, and improving financial literacy.
It stated that broad-based financial wellbeing programmes are the most successful in meeting employees’ needs and leading to improved finances.
The Willis Towers Watson 2019/2020 Global Benefits Attitudes Survey measured attitudes of more than 40,000 employees at medium and large private sector employees in 27 countries.
A total of 4,001 UK workers participated in the survey, which was conducted between July and September 2019.