Eight out of 10 employees are concerned about rising living costs, with rising debts and insufficient savings adding to their problems, according to research from Thomsons Online Benefits.
Their survey of 2,000 UK workers found one in four (26 per cent) were concerned about rising energy bills, while one in five (21 per cent) were were about escalating mortgage or rental costs. This figure increased to 28 per cent among the under 35s.
A further 19 per cent also cited rising food costs as being a financial concern.
At the same time, recent research from the TUC showed unsecured debt was rose to an average of £15,880 per household in the first quarter of 2019.
The Thomsons’ research showed that a quarter of respondents say that eliminating this debt is now their main financial priority. However despite this seven out of 10 (71 per cent) of these people are still trying to save each month, instead of paying down these debts.
Thomsons is calling for employers to do more to help employees manage these debts – however it points out that employers also need support and guidance on building benefit schemes that properly reflect the financial needs of their workforce.
Thomsons Online Benefits consulting director Jack Curzon says: “We’re seeing a concerning rise in the number of employees accruing debt but simultaneously also putting aside savings.
“This is a false economy that people need to avoid and change their habits. Employers – and their people – really need to view achieving financial wellness as a three-step ladder, where they move from clearing debt, to short-term saving, to long-term financial stability and investments. To effectively support this, employers need to offer a suite of solutions, that help people at every stage.”
The research also shows employees are saving significantly less than the recommended 20 per cent of their monthly salary needed to protect against current and future expenses.
On average UK employees save just 12 per cent of their wages, with one in five saving 5 per cent or less each month.
In total 13 per cent admit to saving nothing at all, with women disproportionately affected. In total 18 per cent of women said they were not saving on a monthly basis, compared to just 9 per cent of men.
Curzon adds: “Employers need to do their bit to put saving on a par with spending in the UK.
“Over recent years, the rise of online shopping, combined with increasingly accessible credit, has made it very easy for people to dispense of their cash.
“Advancements in benefits technology are countering this, and there are now numerous savings solutions on the market that employees could access via a workplace portal.
“However, employers cannot rely on product or provider-led solutions alone. HR professionals need to introduce support from a strategic level, that empowers people to make good financial decisions and helps them to change their spending habits for good.”