A nationwide study of the financial wellbeing of UK workers ‘The DNA of Financial Wellbeing 2017’ report1, shows that employee financial confidence has fallen over the last 12 months, with Brexit named as a major factor. The survey highlighted that 35 per cent have changed their view on their finances in general following the UK’s decision to leave the EU, while one third (33 per cent) of employees cite finance as their biggest concern.
The findings from Neyber, the financial wellbeing company, also found that 48% of workers are borrowing money to meet their basic financial needs. This rises to two thirds (67%) of workers under 34 years.
It is likely that an increase in so-called zero hour contracts means that a quarter of UK workers have an income fluctuation of more than 10 per cent each month, increasing to 45 per cent for those aged 18-24. This significantly undermines people’s ability to manage, budget, plan and save on a day-to-day basis.
Moreover, this fluctuation in income is contributing to financial exclusion due to an inability to access cost effective financial products. Indeed, one quarter of employers felt their employees would be considered financially excluded2.
The report also highlights a divergence between employer engagement around financial wellbeing and the wishes and needs of their workers. For instance 24 per cent of employers feel that employees would turn to their manager for support if they were worried about money and 15 per cent would talk to their HR team. The reality is different, only three per cent* of employees would turn to their employer if they had money worries.
While they feel uncomfortable about approaching their employer, they are looking to employers to offer support and guidance (42 per cent).
Two fifths of workers think that their employer fails to communicate anything to do with financial support. This contrasts with 56 per cent of businesses which would rank themselves highly in this area. 22 percent of employers say that improving their benefits package was a top priority.
The impacts of poor financial wellbeing are striking for business – 54 per cent of employers say it impacts on employee behaviour, 56 per cent on job performance, 54 per cent on relationships at work and 51 per cent say it impacts relationships with management.
Heidi Allan, Head of Insights and Engagement at Neyber, said:
“A lack of longer-term financial resilience built into UK households, along with fluctuating earnings leaves a large portion of the UK population poorly prepared for the future. Unfortunately, it means they are also ill-prepared for day-to-day changes such as rises in essential spending like utilities.
“Employers are seeing the affects on their employees, with 40% believing financial concerns are causing employee stress and nearly one quarter (23%) believing their employees are losing sleep because of money worries.
“A positive shown in this year’s report is the increase in awareness within the employer community – their next step is to take action to help employees improve their own personal outcomes for the good of both audiences.”
To find out more about Neyber, please visit the website: www.neyber.co.uk.
110,004 employees and 516 HR directors were interviewed online by Opinium Research between 10th January and 6th February 2017.
2Financial exclusion arises from a range of demographic and regional factors that include inability to access or prohibitively expensive financial products, regional differences – so products not available to all in respect of where they are based, living in remote communities without physical transport infrastructure to link them to major locations, non-UK nationals not catered for by mainstream financial lenders and reduction of physical high street presence by mainstream financial branches.
Rebecca joined the HRreview editorial team in January 2016. After graduating from the University of Sheffield Hallam in 2013 with a BA in English Literature, Rebecca has spent five years working in print and online journalism in Manchester and London. In the past she has been part of the editorial teams at Sleeper and Dezeen and has founded her own arts collective.