One in 10 employees don’t earn enough to pay for food and bills, CIPD poll finds

Research also reveals a quarter would be unable to cope with a £300 emergency, and half do not earn enough to save for retirement

One in 10 employees are not paid enough to cover basic necessities without going into debt, a CIPD poll has found.

The YouGov survey, which collected data from 2,557 employees, found 12 per cent said their pay was not high enough for them to have an acceptable standard of living without going into debt paying for food or bills.

Similarly, 10 per cent said they did not think their job protected them from falling into poverty, and more than a quarter (27 per cent) of respondents said that their current level of pay was not enough to cope with a £300 emergency without having to dip into savings.

Less than half (47 per cent) said that they earned enough to save for retirement.

The research, conducted in December and January, also found that financial insecurity was having a knock-on effect on performance at work.

More than a quarter (28 per cent) said that money problems affected their job performance, increasing to a third (34 per cent) among those earning less than £20,000, while a fifth (19 per cent) said that money worries affected their quality of sleep.

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In total, 19 per cent said their employer was not doing enough to help their financial wellbeing.

Charles Cotton, senior reward and performance adviser at the CIPD, said these financial problems pre-dated the current cost of living crisis, but that the recent increase in prices of everything from food to fuel was “likely to push more and more employees into in-work poverty”.

“The biggest difference an employer can make is to pay a fair and livable wage,” he said, adding that the cost of living crisis and competition for talent should motivate employers to adopt a financial wellbeing policy or improve their existing one.

“Our research highlights that employers with a financial wellbeing policy really do make a much-valued difference to the lives of their people,” said Cotton.

Employees whose organisation had a financial wellbeing policy were more likely to say their employer did enough to support their financial wellbeing when compared to firms that did not (60 per cent compared to 28 per cent).

They were more likely to say that they are able to keep up with bills and credit card payments without difficulty (70 per cent compared to 58 per cent), and more likely to say their pay was enough to save for retirement (61 per cent compared to 41 per cent).

These employees were also more likely to say they had a good level of benefits (70 per cent compared to 28 per cent), including a generous pension (64 per cent compared to 26 per cent).

Louise Woodruff, policy and partnership manager at Joseph Rowntree Foundation, said employers had the power to “make the difference between staff being on the edge financially, and offering them a firm foundation to be able to build a better life for themselves and their families.”

This is not just about paying higher wages, she said, but also extended to having policies in place that “allow people to plan, to know what their income will be in advance, and to know how they would meet an unexpected cost”.

“Where employers can help their staff through the current pressures on their cost of living, they are likely to reap the benefits in terms of loyalty, retention, and a healthier, more content workforce, as well as helping to eliminate the huge injustice of in-work poverty,” said Woodruff.

The CIPD recently released guidance for employers looking to tackle in-work poverty.