A recent study undertaken by Close Brothers utilising their Financial Wellbeing Index puts into perspective the extensive number of UK employees plagued by financial concerns.
The Weight of Money Worries
The index assessed seven aspects related to financial health, with over 5,000 employees and over 1,000 employers having participated. The average score for employees out of 100 was a mere 53.6, indicating the extent of poor financial health within the UK.
A staggering 94% of workers reported having money worries, with 40% finding they’re affected by these worries frequently or constantly. Around 25 million workers, estimated from the 77% of those in the research, appear to be negatively affected by their worries and financial stresses while in work.
Financial health was divided into distinct areas, including savings and investments, debt, retirement planning, properties and mortgages, tax, planning and budgeting and protection. Scoring the lowest were the latter three, with average scores of 48.5, 48.8 and 42.5 respectively.
Around 34% of respondents felt unprepared should there be an unexpected change in their circumstances, such as a loss of their income or unforeseen costs incurred elsewhere.
The third largest concern was for people worrying how they would cope if they were to lose their job, but only 8% had any form of income protection.
The second largest worry was paying off debt. However, the story shown by the study suggests some positive trends, with 42% not considering debt to be a concern.
More than half did not have a financial plan in place, and 76% were unaware of the tax reliefs available to them or whether they were using tax allowances to their full degree.
Financial Stresses Impacting Work
The strain and impact these concerns have is wide-reaching, affecting both mental and physical health while also seeping into workplace productivity and affecting the bottom line for employers.
Around 72% of those in the 35-54 age bracket and 87% of those below this age group reported that money concerns interfere with their work. The over-55s felt less impact during work from money worries, and yet this figure is still at 47%.
Worrying about money is a distraction at work, impinging on productivity and often resulting in more time off work through stress or sickness. Research undertaken by the insurance company Axa discovered 70% of employees spent time worrying about money while at work, and 5% reported taking time off due to financial concerns.
The Impact on Businesses
Approximately 89% of UK businesses are thought to be affected by negative employee financial health. It’s a challenging aspect given the personal nature of finances, but businesses are in a place of responsibility with the ability to provide some level of support.
The knock-on effects include the likes of increases absences from work, increased costs to healthcare and reduction in retirees, talent and productivity. The financial cost incurred for British employers in total as a result of depression, stress and anxiety is £15.1 billion, according to the Centre for Mental Health.
Businesses are increasingly prioritising financial wellbeing, with 45% now integrating strategies into the workplace. These can include additional benefits to aid employees, such as financial advice, assistance programmes, discount vouchers and workplace loans.
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