A third of UK workers (36%) are living month-to-month without any spare cash for emergencies or shocks, affecting employees financial wellbeing.
A quarter (26%) struggling financially, according to WTW’s Financial Wellbeing study of over 4,000 UK employees, according to WTW’s Financial Wellbeing study.
The research also reveals that 44 percent of employees have suffered a financial shock in the last two years.
These include a cut in hours, significant medical expenses or being a victim of fraud.
Financial wellbeing: what are the results of these financial shocks?
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.
What can employers do to help?
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 percent 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.
Stewart Patterson, Director for LifeSight, WTW’s DC master trust, says: “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 support 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.
“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.”
Amelia Brand is the Editor for HRreview. With a master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.