The UK population is facing a savings crisis. A quarter of adults have less than £100 tucked away, and one in six have nothing.
While the macroeconomic climate is adding to these pressures, it is not the only factor at play. The financial system is stacked against half of the working population.
Shift-based and frontline workers have been priced out by traditional finance; either they are charged more than the other 50 per cent, or they are not given access at all.
This is true across a broad range of financial products, ranging from credit and insurance, right through to energy and mobile phone tariffs.
This is not just a personal finance issue, it is a growing concern for employers too: the productivity penalty and health costs of financial stress.
So what actually is financial wellbeing, and why should employers care about it?
Financial wellbeing can be defined as a person’s ability to make the most of their money and finances on a day-to-day basis, dealing with the unexpected, and being on track for a healthy financial future. The Money & Pensions Service defines it as “financially resilient, confident and empowered”.
When someone does not meet this definition, there can be significant effects on their mental and physical wellbeing – effects that inevitably show up in the workplace.
Money worries can impact someone so deeply, that it costs them up to 13 IQ points, according to Scientific American Mind. This is a significant amount, taking someone with average intelligence down to a category called ‘borderline deficient’, and is more impactful on performance than losing a night's sleep or the effects of chronic alcoholism.
At work, employees are less able to make sound decisions, less productive, and less capable of controlling their emotions and impulses – and it does not stop there.
As well as impacting cognitive function and ability, money worries can have psychological health impacts including anxiety, depression and feelings of shame and guilt, which can manifest physically into sleep problems and a decrease in energy levels.
These issues are not happening on a small scale either. In a 2024 survey, 60 per cent of employees said they worry about money at least once a week, with 21 per cent worrying about their finances every single day.
Employers want to help, and this extends beyond pay raises to include initiatives that improve access and affordability of essential financial services, to alleviate money worries.
The rise of workplace initiatives
Since the cost of living crisis began, financial wellbeing support has been a permanent fixture on the boardroom agenda. While this once looked like ad-hoc tactical solutions, businesses are now upping investment in inclusive workplace finance, offering new types of financial wellbeing benefits to staff.
This is more than just cycle to work schemes, train ticket season loans and staff discounts; this is employers stepping in to replace traditional finance, by closing the gap in access to fair products – fairer, cheaper, financial products and services, tailored to the needs of their people.
