Financial wellbeing 2019 – companies need to do more.
Download the complete 2019 WWS from the link below
More workers are using high-cost credit options between pay days despite knowing they’ll struggle
Following on from last years WWS18, we have commissioned more independent research to understand the pressures faced by UK workforces. The findings show that now more than ever, employers need to act.
The research recorded a 4% increase, from 2018, in workers using options such as credit cards, overdrafts and payday loans. Last year’s report highlighted the impact that personal finance related stress can have on workplace performance as well as sleep, health and relationships. The rise in workers using high cost credit has meant these issues are being exacerbated, with respondents reporting a 10% increase in financial stress.
The 2019 report also reveals that a third of workers feel they often need to borrow money, highlighting cashflow management issues within the UK’s workforces. The growing reliance on high cost credit between pay days has resulted in 38% of workers applying for high cost credit options despite knowing they would struggle to keep up with repayments.
“There is a clear need for a safe and ethical alternative to borrowing to get by,” says James, our CEO. “Workers deserve a fair chance to live debt free but are being held back by traditionally rigid pay cycles that simply don’t fit with modern financial demands. Employers have a responsibility to do what they can to improve financial wellbeing, starting with better education around finances and alternatives to high cost credit.”
Jasmine Birtles from Moneymagpie.com, tv personality and money expert adds: “These findings show how important it is for people to be financially fit in order to have more stability in their lives and also to be more productive at work. Employers have a lot on their plates as it is, but these figures show that if they help their employees get on top of their finances it will materially improve their bottom line.”
Despite the introduction of tougher financial regulations on lenders, workers reported an increase in the level of difficulty experienced as a direct result of using high cost credit. Volume of workers that scored their experiences with different high cost credit options as ‘difficult’:
- Payday loans: 59% (47% in 2018)
- Credit cards: 48% (36% in 2018)
- Doorstep loans: 56% (45% in 2018)
- Overdrafts: 51% (40% in 2018)
- Loans from family and friends: 45% (38% in 2018)
- Loans from other sources: 53% (40% in 2018)
The research also reveals how the face of credit appears to be changing. Buy-now-pay-later schemes have become more widely available in recent years and 56% of millennial workers (those aged 18-34) say that these schemes encourage them to spend money they don’t have. Those earning over £100,000 per annum are the most likely to say they are negatively influenced by buy-now-pay-later schemes (77%), supporting the notion that financial wellbeing is not an issue faced exclusively by low earners, it is a cash flow concern that is felt by workers across the board.
Digital money management tools are bringing workers some respite from financial stress. 70% of workers feel happier when using digital money management tools such as credit score and reporting apps, budgeting apps, challenger banks and micro investing apps. Workers say digital tools help them to save money, track their spending with greater visibility, make better financial decisions and reduce debt.
Download the complete 2019 WWS from the link below
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For the 2018 WWS, please click here.Hastee_Pay_TWWS_ FINAL Spread
