Money worries are something most people can relate to – in fact research shows that UK workers often run out of cash before payday. For those that have little to no savings to fall back on, this has a detrimental impact on wellbeing. But this financial stress doesn’t just impact life at home, it is also negatively affecting performance at work.
Recent research conducted by Salary Finance revealed 40% of workers in Britain have financial worries, 34% regularly run out of money before payday, and 70% save less than £100 a month.
These money problems directly correlate to feelings of stress and even depression, which has a knock-on impact in all areas of life.
To better understand these trends Salary Finance conducted extensive research around money worries, including its Financial Wellbeing Survey of 10,053 UK employees and a further survey of 2,000 Brits to understand rainy day saving habits. This has led to the creation of the Employer’s Guide to Savings in association with Yorkshire Building Society, which seeks to demonstrate the importance of helping employees build financial resilience through saving.
The research found that employees in Britain have a lack of savings and funds of money reserved for a ‘rainy day’ – or unexpected need for additional funds. It was also clear that the level of financial worry increased when individuals were regularly running out of money before payday. These two pressures are combining to cause significant financial stress for employees.
Those with financial worries are nearly 9 times more likely to have sleepless nights and nearly 5 times more likely to be suffering with depression.
Worryingly for employers, 41% of employees said their work is affected by this stress, and 1 in 4 people with money concerns is likely to be looking to move jobs – compared to only 1 in 10 of those without such worries.
These stats build the case for employers to ensure a better level of financial wellbeing amongst their staff. But this doesn’t need to mean pay rises all round.
Actually, stats show that 33% of employees earning over £60,000 per annum are still regularly running out of money before payday and 49% of those earning over £100,000 a year have money worries versus 40% of people overall. And 18% of households earning over £55k have no cash savings whatsoever. Higher pay doesn’t necessarily lead to improved financial wellbeing.
A number of workers also cited time as a barrier to saving – with 41% saying they don’t have the time to save. Younger Brits are also finding it hard to save, meaning of those aged 18-24, half have less than £500 in rainy day savings and on average would run out of money in just over a month if they lost their job and had no income.
Ultimately the research demonstrated that financial wellbeing is a consequence of an individual’s borrow, save and spend habits and saving is increased when frictionless options are available.
This is why salary linked savings accounts can be very beneficial. If the money goes straight from the salary into savings, rather than a current account, it simply isn’t ‘missed’. And with 77% of employees trusting their employer to keep their financial situation private, employers are in a great position to support improved saving habits.
To find out more click here to download a free copy of our new Employer’s Guide to Savings or visit www.salaryfinance.com/employers-savings-guide/