36% of workers live payday to payday

Payday is a date in the month every worker looks forward to, but it seems that a third (36%) of UK workers particularly anticipate this day as they shared they live month-to-month without any spare cash for emergencies.

In Willis Towers Watson’s Financial Wellbeing study of 4,000 UK employees, it found that 44% have suffered some kind of financial shock in the last two years, such as a cut in hours, significant medical expenses or being a victim of fraud.

These types of shocks can have a wider impact on peoples’ financial health too, for example those who have suffered from a financial shock, around a third were unable to pay their mortgage, rent or utility bills, while 29% took a salary advance.

Plus, the data uncovered links between finances and mental health as those struggling financially are three times more likely to suffer with anxiety or depression (68%) than those who are not concerned about their money situation.

Reflecting on the findings, Stewart Patterson, director for LifeSight, WTW’s DC master trust, stated that these stresses felt by employees can have a negative impact on their personal lives, as well as their performance at work.

“We know that financial problems are strongly connected to other issues including anxiety, health problems, loneliness and lower performance at work, and so many employers are looking at ways to ease the burden on their employees,” he added.

“This can include tools and support designed to help with budgeting and financial planning, as well as flexible ways in which employee benefit budgets can be used to help those struggling in the short term.”

A clear age divide was uncovered too when it comes to high financial wellbeing, as 77% of older workers in the boomer generation are more likely to have better wellbeing in this regard, compared to gen Z workers (28%).

To tackle their financial challenges, many workers are looking to their organisation for support.

In fact, two in five employees think that financial apps and tools should be a vital part of a company’s employee benefits offering, while 39% agreed they trust financial apps, tools and advisors that are suggested by their employer more than those they can find on their own.

Plus, over half of respondents that are struggling financially said the resources and initiatives provided by their employer have 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. The use of financial wellbeing apps, tools and support can provide real help for employees that need it the most.”

Managing pay and wellbeing will be a focus during Global Payroll Question Time in July – save your free space to the virtual broadcast here.