Worrying about money is the leading cause of stress and harm to the wellbeing of British workers, according to a major study of over 2,000 employees from around the UK, published today.
Topping the list of worries, financial concerns were a problem for 36% of those surveyed.
Perhaps surprisingly, money worries were found to be significantly greater (73%) than concerns in other key areas of peoples’ lives, including relationships (38%), career (52%) and health (47%).
Personal relationships also suffer greatly, those with financial worries are 12 times more likely to have troubled relationships with friends and family.
And those with money troubles were shockingly four times more likely to be suffering from anxiety and panic attacks (43%), and five times more likely to feel depressed (46%)*, compared to those with positive financial wellbeing.
The annual study, conducted by Salary Finance – a financial wellbeing employee benefits provider – also showed that sleepless nights were 15 times more common among those with financial worries, a significant increase on the ‘nine times’ reported in the 2018 study carried out by the firm.
The 2019 research by Salary Finance identified a fourfold decrease in an employee’s ability to complete everyday tasks compared to last year’s study, with those in dire financial situations 12 times more likely to procrastinate or leave work incomplete. It also showed on average, those with money worries spend at least three hours dealing with personal financial issues on a weekly basis.
Money troubles are also affecting people in more unlikely ways, with those suffering from low financial wellbeing eight times more likely to have troubled relationships with work colleagues (up from ‘six times’ in 2018). What’s more, those with financial stress are nine times more likely to see the quality of their work affected negatively.
On average, employees take one sick day per year to deal with financial issues and, while this may not seem much on the surface, the cost in lost working days of an entire workforce to a business can build up quickly. Financial stresses result in almost 30 productive days lost overall annually and the financial consequence for employers is significant – estimated to equal 9-13% of their payroll.
Asesh Sarkar, CEO and co-founder of Salary Finance, said: “The research shows a direct correlation between low financial wellbeing and poor mental health in an increasing number of employees across the UK. An employer’s role to address this is more prevalent than ever before and the statistics show that businesses can make significant savings if they implement the right financial wellbeing strategies.
“We strongly believe that an organisation that has a mental wellbeing strategy without a financial one alongside it is driving along with its foot on the accelerator and the brake pedal simultaneously. This issue will not go away on its own so the time for employers to act is now. I am confident that the insights in this research will be a big step towards a more efficient and driven workforce across the country.”
Almost a third of those surveyed, regularly run out of money before payday and are forced to resort to payday loans, credit cards and overdrafts to get them through to the next paycheque, all of which contribute to an increase in the stress and anxiety they feel on a daily basis.
Interestingly, the study found financial stresses of an employee are not necessarily eliminated with pay rises; according to the findings almost one third of those earning between £40-60k still have money worries and those earning over £100k per annum have the same level of financial worries as those that earn less than £10k.
The report identified that employees largely fall into one of two main groups. ‘Planners’ (40% of employees) find it relatively easy to save first and spend later, and are engaged and interested in personal finance, whereas ‘Copers’ (28% of employees), tend to spend first and save whenever they can. It’s perhaps not surprising that Copers therefore tend to have more financial worries than Planners – 62% of Copers versus 21% of Planners.
What was surprising, and contrary to common opinion, was the finding that Copers and Planners both know the importance of budgeting and saving. Less than 4% of employees don’t know how to budget. The study also found that 86% of employees know and understand the importance of saving, this was broadly consistent across all levels of financial wellbeing. The research suggests that, when it comes to budgeting and saving, there isn’t necessarily an education gap – people know what they need to do.
Jason Butler, Head of Financial Education at Salary Finance commented on the financial habits of these groups. He said: “We know that all employees have similar intentions when it comes to managing finances and savings. Both groups want to save and know they need to save, but what sets them apart is their mindset and how they turn this intention into action.
“We strongly believe that financial wellbeing is more about behaviour and your everyday habits than it is about education or having a long-term plan in place. Employers today are uniquely placed to help their workforce address this and can, with the right solutions in place, help them save better and avoid debt. By providing tangible, practical and high impact solutions through payroll and easy-to-use financial products, businesses can effectively help employees help themselves every day.”