Financial Wellbeing Impacted By Cost-Of-Living Crisis

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29 August 2023 – The cost-of-living crisis is causing UK employees a lot of stress. Despite this, 64% of workers say that their employers aren’t supporting them with measures to improve their financial wellbeing.

Many households have seen their budgets shrink due to the cost-of-living crisis. Especially the rising costs of food and energy hit many people hard.

As a result, workers looked to their employers for support. According to figures by Statista, average weekly earnings between April and June 2023 rose by 7.8% in the UK. However, with inflation at 7.9% in June, the wage rise didn’t keep up with increased living costs.

This prompted strike actions by many unions in the private as well as public sectors, with some still ongoing. The importance of employers supporting their workers financial wellbeing has been highlighted in a recent study.

44% Of UK Employees Would Change Employer For Better Financial Wellbeing Support

The financial wellbeing platform Mintago has surveyed 1,333 UK employees working part- or full-time. The results show that 9% reported feeling “very stressed” and 30% “somewhat stressed”.

The main source of stress is rising living costs, which were named by 62% of workers. Money and finance was the second-biggest stress factor, with 58% of respondents choosing this option.

Work pressures were only named by 45% and only 33% said their health and fitness caused them stress.

Given that money-related issues are the biggest source of stress for UK employees, it is important that small businesses put adequate measures in place to support their staff with their financial wellbeing.

Regardless of industry or income level, it is vital that employers step up and deliver robust, complete, and impactful financial wellbeing support. It must fit the unique needs of each individual member of staff – businesses cannot take a tick-box approach.

Chieu Cao, CEO of Mintago

However, the survey findings show that only 36% of employees say their company put measures in place to help them with financial issues. And only 29% of those said that these measures actually helped.

So it is not surprising that 44% of respondents said that they would leave their current company for one that provides better support for their financial wellbeing.

This should make small businesses sit up and listen. The support doesn’t necessarily mean a pay rise. Support measures could include workshops and courses about budgeting, debt management and making sound financial decisions.

Giving staff more flexibility in terms of working hours and remote working can also help your staff manage their finances better.

Other measures could include providing staff with financial tools, such as apps, to manage their finances better.

Women And Lower Income Workers Impacted The Most

Mintago’s survey has also shown that people on incomes below £30,000 and female staff feel more stressed. The group of employees on lower incomes will likely include many women, who still tend to earn less than their male counterparts. In 2022, there was a gender pay gap in the UK of 8.3%.

For all groups, rising living costs are the biggest stress factor. Overall, 62% have named it their main concern. For people on incomes below £30,000 69% are stressed by increased costs of living.

69% of women identified rising living costs as the biggest concern, while only 53% of men did. Money and finances in general were a big stress factor for 65% of women, but only 48% of men.

Generally, women feel more stressed than men, with 48% of female staff saying they felt “very” or “somewhat” stressed, with only 31% of men saying so.

The gender pay gap is common knowledge, and our new research underlines the impact this has on people’s wellbeing, with women far more stressed than men during the cost-of-living crisis. Inflation remains sky-high, so money worries will not dissipate any time soon.

Chieu Cao, CEO of Mintago

When it comes to support from their employer, staff on incomes below £30,000 feel less supported. 36% of all workers said their company has put support measures into place. For lower income workers, only 26% said the same.

Given that people on lower incomes were harder hit by price rises, they need more support. However, Mintago’s research suggests that this is not the case, on the contrary.

Not only do lower income employees feel less supported, the support that is offered, is seen as less helpful by them. Overall, 29% of respondents said the measures put in place by their employer helped them to improve their financial situation.

For staff on an income less than £30,000 only 18% said the support measures helped them.

This insightful research shows that all UK employees are looking for support with their financial wellbeing from their employer. But women and staff on lower incomes are impacted more by the economic situation and as a result are more concerned by it.

Stressed workers are less productive, so it is in every business’ interest to support their staff when times get tough.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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