Recent research paints a worrying picture of how little financial resilience many workers have built up, particularly younger ones. The implications for employers are significant; Financial stress doesn’t stop at the front door of the workplace, it directly affects mental health, productivity, retention and engagement. 

A lack of financial safety nets 

New research from OneFamily Group highlights just how exposed many young UK adults are. With 51% saying they do put money aside for if they are unable to work due to illness, injury or redundancy, a striking 44% say they rarely or never do. In real terms, this equates to more than seven million young adults who are financially vulnerable should their income be interrupted.

This lack of preparation is particularly concerning given the volatility of modern working life. Ill health, redundancy, caring responsibilities or economic shocks are no longer rare events, yet millions of people are potentially gambling that nothing will go wrong. For employers, that creates a workforce operating under constant, low-level financial anxiety. 

The picture becomes even more stark when looking at those who are already more likely to experience work disruption. Among people with long-term physical or mental health conditions lasting 12 months or more, 53% say they rarely or never put money aside, while only 41% say they do. Meaning the very people who may need financial buffers the most are the least likely to have them. 

Financial stress and disengagement go hand in hand 

Financial insecurity doesn’t exist in isolation. It shapes how people feel about their jobs, their careers and their futures. Research from ZETY shows that 35% of British workers have thought about changing careers due to money worries. For 12% of those considering a move, the cost-of-living crisis is the direct driver.

If the financial situation worsens, an estimated 10 million more people say they would consider taking on a second job. While this may offer short-term relief, it also increases the risk of burnout, fatigue and disengagement from primary roles. 

For employers, this has clear consequences. Employees who are preoccupied with financial survival are less likely to be focused on development, innovation or long-term growth within an organisation. Instead, they are more likely to be distracted, exhausted, or actively looking for ways out and actively encouraging the two-year tenure culture. 

The link between savings and mental health 

The relationship between savings and wellbeing is not just anecdotal- it is measurable. YouGov research found that individuals with less than £1,000 in savings were almost three times more likely to report poor mental health compared to those with more than £1,000 saved. 

This highlights an important point for employers: savings are not simply a financial tool; they are a psychological one. Even relatively modest emergency funds can provide a sense of control and security, reduce anxiety and improve overall wellbeing. In contrast, the absence of any financial buffer can amplify stress, particularly when combined with job insecurity or rising living costs. 

Poor mental health is already one of the leading causes of sickness, absence and burnout in the UK. When financial stress is layered on top, the impact on engagement and productivity becomes even more pronounced. 

Who is most financially vulnerable in the workplace? 

OneFamily’s research reveals that financial vulnerability is not evenly distributed across the workforce. Certain groups are consistently less likely to have savings in place. 

Young women, for example, are more financially vulnerable than men, with significantly lower savings rates. This has implications not only for engagement today, but also for long-term financial outcomes such as retirement security. 

People with long-term physical or mental health conditions face a double challenge: a higher likelihood of being unable to work for periods of time, combined with lower levels of savings to support them when that happens. 

Housing status also plays a role. Renters are substantially less likely to save compared to homeowners, underlining the link between housing insecurity and financial resilience. With many younger employees locked out of home ownership, this creates a cohort that is structurally more exposed to financial shocks. 

Single employees are another at-risk group. Without a partner’s income to fall back on, financial disruption can be more severe, yet single people are significantly less likely to save regularly than those who are married. 

For employers, these groups often overlap with early-career talent, frontline staff and key operational roles. Ignoring their financial wellbeing risks disengagement and higher turnover among exactly the employees organisations are trying hardest to retain. 

Why employers have a growing role to play 

Traditionally, saving has been seen as a personal responsibility. But the workplace already plays a major role in shaping financial behaviour, particularly through pensions. As financial pressures intensify, there is a growing recognition that employers can, and potentially should, more to support savings engagement. 

This is not about replacing pay rises or taking responsibility for personal finances. It is about reducing vulnerability and tailoring benefits packages to suit the employee. A workforce with even basic financial buffers is more resilient, more focused and better able to engage with work. 

Importantly, supporting savings does not require employees to set aside large sums. As OneFamily points out, even a few pounds a month can make a meaningful difference over time. The challenge is helping employees overcome the perception that saving is impossible when budgets are already stretched. 

Building a culture of financial resilience 

Employers are uniquely positioned to normalise saving behaviours. By talking openly about financial resilience, offering education, and integrating savings into broader wellbeing strategies, organisations can help employees move from short-term survival to longer-term stability.

Targeted support also matters. Understanding which groups are most financially vulnerable allows employers to design inclusive approaches without stigma. The goal is not to single people out, but to ensure that support is accessible, relevant and practical. 

Targeted savings initiatives 

This extends to the issue of how they are targeted for savings. The most commonly used workplace savings practice is the pension, yet under 40’s often prioritise saving for their first home over contributing to a pension, and in a multigenerational workforce we have to consider whether the over 65’s would want additional contributions to a pension they are in receipt of. 

Workplace ISAs are a potential solution, but the Financial Conduct Authority warned that opt-in systems may not be worth it due to the low uptake. This is often a combination of issues stemming from employees understanding the full range of their reward packages, an issue solvable through clear and concise reward programme communication.

But the key comes down to organisations exploring the benefits packages they can offer and understanding their employee base to ensure that the rewards they are offered are applicable to each individual. 

Engagement starts with security 

Employee engagement cannot thrive in an environment of constant financial anxiety. When people are worried about how they would cope with illness, redundancy or unexpected expenses, engagement initiatives risk feeling superficial. 

Savings security is becoming one of the clearest indicators of whether employees feel safe enough to thrive at work. For employers, helping staff build that security is not just a wellbeing initiative- it is a strategic investment in engagement, retention and performance.