Poor financial wellbeing costs UK businesses £1.56 billion

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UK workers take four million days off a year because of financial concerns, while those who suffer at work can lose up to two hours of output each day, according to research from Aegon

Its report, carried out in partnership with the Centre for Economics and Business Research, explored and analysed financial wellbeing across UK employees and calculated the impact on workplace productivity.

It found that while younger workers experienced the most money worries and lowest financial wellbeing scores, they are the generation who feel they are doing the most to prepare for the future.

Just under half (46%) of people under the age of 35 say they are doing everything they can to secure their financial future, compared to just over a third (37%) of people aged 55 and above.

Employees in smaller businesses were found to be hardest hit, with 34% of people working in small companies (fewer than 50 employees) agreeing they are only getting by financially compared to 28% in large companies (250+ employees). This could reflect the greater efforts made by larger employers to promote financial wellbeing, the research suggested.

While 35% of employees feel they would benefit from receiving financial education, just 16% are currently receiving this from their employer.

Separate research carried out by Aegon found 45% of employers feel they would be intruding in their employees’ lives if they approached them about their financial concerns, while nearly half feel it isn’t their placed to get involved. This is despite 75% of employers saying their employees’ productivity has been affected by money worries.

These findings come as part of a wider campaign launched by Aegon aimed at tackling financial wellbeing in the workplace. The firm made a number of recommendations, including increasing awareness among employers of the government’s £500 allowance for pensions advice, for financial wellbeing to be viewed as seriously as physical and mental wellbeing, and greater support for employers to offer financial education.

Ronnie Taylor, chief distribution officer at Aegon, said that the research demonstrates the impact of poor financial wellbeing. “Poor financial wellbeing is a huge issue affecting both employers and employees. We’ve uncovered significant evidence that it is damaging productivity in workplaces up and down the country,” he said.

“Employers need help when it comes to improving employee financial wellbeing. Many aren’t aware of what they can offer employees, while others simply don’t feel it’s their place. That needs to change. Our research shows employees both need and want some kind of financial support and highlights just what a difference it can make.”

He added that the issue must be addressed by employers urgently. “There is a need for businesses to understand more about this issue and urgently address its causes. This has been a long-term problem for employers, but our research shows that those who can focus on and address this issue are likely to reap significant benefits to their bottom line.”

The research was based on a survey of 2,000 UK employees across a range of sectors, company sizes and job roles, carried out by YouGov.

The £1.56 billion figure of the impact of financial wellbeing on UK businesses was calculated from a combination of absenteeism (employees missing work) and worker presenteeism (employees attending work but operating with a lower productivity).

Want to learn more about financial wellbeing best practice? Register for our webinar on 31 October, 12.30pm to gain insight into this topical and critical area of HR.

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