A quarter of people are suffering with money worries so substantial that it is affecting their ability to do their job, according to a new survey of more than 1800 UK employees. The number reporting problems rises to a nearly a third (31%) among 18-24 year olds and those living in London (32%).
The research, published by the CIPD and Close Brothers Asset Management, highlights why organisations need to be doing more to promote and actively support financial wellbeing, especially in a climate where pay will be squeezed as inflation rises.
The problem is not limited to low earners either, with one in five (20%) of employees earning £45,000 to £59,999 saying that financial anxiety has affected their ability to do their job. Meanwhile, women are more likely than men to report that money worries are affecting their work, with nearly three in 10 (28%) reporting the problem, compared with less than one in four (23%) men.
Charles Cotton, reward and performance adviser at the CIPD, the professional body for HR and people development, said: “This report shines a light on how financial wellbeing can impact not just employee health, but also workplace productivity. Money worries affect people regardless of their age, gender, or level of pay, and with one in four admitting it negatively impacts their work, it’s clear that organisations should be focussing on financial wellbeing as part of their workplace agenda. This will become increasingly important over the next 18 months, as rising inflation is likely to lead to a pay squeeze and increased concerns about personal finances.
“Employers not only have a duty of care to their employees but will also see their bottom lines benefit if they invest time in developing a financial well-being strategy and play an active role in supporting staff in this area. Today’s businesses need to consider the impact financial worries are having on employee health, happiness and productivity and look at what they can do to help reduce stress levels.”
The report also focussed specifically on what could be done to improve financial wellbeing. While earning a higher wage was the top cited solution, a third of employees (32%) did not include this in their top five, demonstrating that boosting pay was not enough. Other solutions chosen included being rewarded in a fair and consistent manner (41%), being able to save for the future through a pension (26%), and being able to develop and progress in their career (20%).
The report also found that:
- Physical fatigue caused by lost sleep worrying about money is the most common explanation for how financial concerns have impacted people’s productivity, with one in five employees (19%) reporting this
- Nearly one in three (30%) in the public sector say money worries have affected their job performance
- Workers in Wales are more likely to rate being able to comfortably pay off existing debts as an important aspect of their financial wellbeing (55%) than the UK as a whole (45%)
- Londoners (60%) are more likely than the UK as a whole (38%) to value being able to save for the future.
Charles Cotton added: “Financial well-being is a sensitive issue, and employers need to recognise that employees may be cautious about discussing their financial circumstances with their colleagues, but getting the system right will ultimately benefit everybody involved. Employers should create a well-rounded reward strategy that recognises this and can flex to meet the individual needs of each employee.”
