Third of workers living payday to payday, survey finds

Those without a cash buffer were also more likely to report feelings of anxiety and loneliness, with employers encouraged to better communicate financial wellbeing packages

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A third of workers in the UK are living from payday to payday without spare money to pay for emergencies, research has warned.

A poll of 4,129 UK employees, conducted in January by Willis Towers Watson and published yesterday (27 June), found 36 per cent of respondents were living month to month without any spare cash in case of an emergency, while a quarter (26 per cent) said they were struggling financially.

It also revealed 44 per cent of employees had suffered from a financial shock in the last two years. Of these people, 34 per cent were left unable to pay their mortgage, rent or utility bills; 29 per cent had to take a salary advance; and a third (33 per cent) said they now expected to retire later than planned.

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According to the survey, employees with financial problems are more likely to engage in self-destructive behaviours: 31 per cent of those living payday to payday said they smoke; 37 per cent reported having poor eating habits; 26 per cent drink too much alcohol; and 19 per cent abuse substances.

Similarly, nearly two-thirds (63 per cent) of those living paycheque to paycheque suffer from anxiety or depression, while 27 per cent reported feelings of loneliness.

Stewart Patterson, director at LifeSight, said financial problems were “strongly connected to other issues”, and urged employers to look at ways to support their staff. “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.”

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Half (52 per cent) of financially struggling employees thought the resources and tools provided by their employer have helped improve their situation, while 42 per cent of respondents said financial apps and tools should be a core part of employee benefits.

Charles Cotton, senior reward and performance adviser at the CIPD, said providing financial tools can form part of the help offered to employees, but should be “part of an overarching approach to employee financial wellbeing”.

This was echoed by Vickie Graham, business development director at the Chartered Institute of Payroll Professionals. “Communication and support needs to be provided regarding what is available to employees and how employers can support them financially,” she said.

“Salary sacrifice and benefits packages are not always understood by employees, so education and ease of access is vital to ensure that employees are able to benefit from initiatives that the employer has invested in.”