The majority of UK workers are struggling to meet basic living costs which is fuelling a sharp decline in financial confidence and wellbeing.
The WTW 2024 Global Benefits Attitudes Survey found 89% of British employees had worries about paying for basic living costs, with four-in-10 extremely worried about the costs they could face.
Furthermore, 59% said money concerns were having a negative impact on their overall wellbeing, resulting in higher levels of stress and anxiety.
The proportion of employees living payday to payday climbed from 36% in 2022 to 40% this year while those worse off financially compared with a year ago increased from 24% in 2019 to 40% this year.
In addition, almost half of UK employees (45%) said they were not on the right track with respect to their finances and more than a quarter (28%) expected their financial situation to worsen over the next year.
The survey of 6,000 UK employees working at medium and large private sector employers across a broad range of industries was conducted from January to March.
Significant gap
It also showed a sharp disconnect between the financial wellbeing support employees want from their employer and what companies are actually delivering.
Employees ranked food (77%), housing (71%), transportation (71%) and interest charges (66%) as their main cost concerns.
Six-in-10 (59%) employees ranked financial wellbeing as the area where they want the most support from their employer over the next three years.
However, other WTW research found only one in four employers (24%) ranked financial wellbeing as a top priority for their wellbeing programme over the next three years.
As a result, growing financial problems and uncertainty with inflation were also affecting employees’ retirement confidence and savings.
Nearly four-in-10 (39%) workers aged over 50 expected to work past age 70, a sharp rise from 27% two years ago, and 31% prior to the pandemic.
Additionally, eight in 10 workers (79%) admit they were not saving as much for retirement as they should be, and less than half (47%) were on the right track to retirement.
Overwhelmed and discouraged
Helen Gilchrist, head of defined contribution consulting at WTW, said: “High inflation combined with the aftermath of a once in a generation pandemic is causing many employees to feel overwhelmed and discouraged about their financial situation, which is affecting overall wellbeing.
“Employers should take action to improve financial wellbeing within their organisation: adequate education for employees to help plan their resources and close financial gaps, as well as connecting employees with relevant elements of their total rewards package.”
Gilchrist added there was a clear disconnect in priorities between employers and employees.
“Employers have an opportunity to align their focus with employee value, cost pressures, and talent objectives to address how their benefit programmes align to retirement and financial wellbeing initiatives.”