More than a third of UK workers are living payday to payday with no spare cash for emergencies or shocks, new research by Willis Towers Watson (WTW) has uncovered.
The study of over 4,000 employees found that 36% are living month-to-month without any spare cash, with 26% struggling financially.
Although overall financial wellbeing has not altered significantly since before COVID-19, the findings also reveal that 44% of employees have suffered some kind of shock in the last two years, such as a cut in hours or significant medical expenses.
For those who have suffered a financial shock, 34% were unable to pay their mortgage, rent or utility bills, while 33% expect to retire later than they anticipated a year ago, and 29% have taken a salary advance.
In addition, the research found links between finances and mental health, as those struggling financially were three times more likely to suffer anxiety or depression than those who were not.
Perhaps unsurprisingly, it was the older workers of the 'boomer' generation who were most likely to have high financial wellbeing, on 77%, compared with 28% of 'Gen Z' workers, who were the least likely.
Stewart Patterson, director for LifeSight, WTW’s DC master trust, said: “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.”
The research also found that those living payday to payday were twice as likely to smoke (31%), have poor eating habits (37%) and drink too much alcohol (26%), and were 10 times more likely to substance abuse (19%).
To help improve the situation, 42% employees said that financial apps and tools should be a core part of employee benefits, with 39% trusting financial apps, tools and advisers that are suggested by their employer more than those they can find on their own.
Half of employees struggling financially said that the resources and initiatives provided by their employer had helped to improve their financial situation.
“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,” Patterson continued.
“The use of financial wellbeing apps, tools and support can provide real help for employees that need it the most.”
Image credit: iStock
Author: Chris Seekings