Over 60 per cent of employees have resorted to borrowing for basic needs in the past year, utilising credit cards, savings, or loans from family and friends.
According to a survey of 10,000 UK employees, financial pressures have a major impact on job performance and employee welfare for 52 per cent of respondents, as well as their money management abilities (53 per cent).
Nearly half lack financial confidence and 74 per cent report feeling stressed, owing primarily to financial and work-related difficulties.
The study also shows a significant increase in financial troubles, with 56 per cent of employees reporting such concerns in the previous year, up from 53 per cent in 2023. Renters have poorer financial confidence, with 60 per cent apprehensive about handling daily spending.
Furthermore, 43 per cent have spent a portion of their workday dealing with personal concerns, while 37 per cent have taken personal absence.
Employees with neurodiverse needs are particularly vulnerable, with 73 per cent lacking confidence in managing their finances. As a result, the value of certain worker benefits has grown dramatically. Employees appreciate financial education at 57 per cent, up from 46 per cent in 2020.
Meanwhile, the value of retail discounts has risen from 57 per cent to 65 per cent, mental health help from 42 per cent to 60 per cent, and employee assistance programmes from 39 per cent to 54 per cent. According to LCP, these developments highlight the importance of comprehensive workplace benefits in promoting employee financial and mental health.
LCP and report author principal Heidi Allan says: “The cost of living in the UK is finally stabilising, but financial confidence is still low for many people. Employers have a crucial role to play in supporting their staff during these times ensuring that their teams have the training and resources to keep up. Building financial confidence in employees is vital as it’s clear that it impacts people’s productivity and general wellbeing.”