Financial stress is increasingly affecting employees’ well-being, leading to lower job satisfaction and increased absenteeism. As the cost of living rises, more individuals are feeling anxious about their financial security, which, according to recent surveys, is taking a toll on mental and physical health. This growing issue is now being addressed ahead of Debt Awareness Week, which begins on Monday 24th March, and Stress Awareness Month in April.
A recent study by CIPHR revealed that financial worries are among the top causes of stress in the UK. The 2023 Quids in! Cost of Living Survey further highlights the deepening impact of financial anxiety, with 40.6% of people reporting feeling scared, worried, or sad about money. Moreover, 22% of respondents said this stress has led to physical illness.
Simon Bocca, founder of PayCaptain, a cloud-based payroll software solution, noted the connection between financial stress and workplace issues. “Financial stress is often found in the workplace and can affect both employees and employers,” Bocca said. “Employees may experience increased absenteeism and presenteeism, which results in reduced productivity and effectiveness. This issue carries substantial costs for employers, not only in terms of lost productivity but also in the impact on employees’ well-being and job satisfaction.”
Victoria Copeland, partnerships manager at MoneyHelper, added that poor mental health can severely affect an individual’s ability to manage their finances. “When experiencing mental health difficulties like depression or anxiety, it becomes harder to make budgeting and spending decisions,” Copeland explained. “You might find yourself making impulsive purchases or avoiding financial responsibilities, such as opening bills or contacting your bank.”
For those struggling with debt and financial stress, Copeland offered some advice. “If you’re in debt and experiencing poor mental health, there are three things you can do: 1) Ask a trusted person to help manage your post. Don’t ignore creditors, as this may make things worse. If you’ve bought something you can’t afford, cancel or return it to get your money back.”
To help individuals regain control of their finances, PayCaptain and MoneyHelper have compiled a list of ten ways to get back on track:
1. Create a budget. Managing your finances starts with understanding where your money is going.
2. Keep bank cards out of easy reach. Reduce the temptation to make impulsive purchases.
3. Remove shopping apps from your phone. This can help reduce mindless spending.
4. Use online tools to block certain websites. Tools like BlockSite can limit access to tempting shopping sites.
5. Learn how to use your credit card wisely. Spend within your means and avoid overspending.
6. Ask creditors for help. Creditors may allow you to reduce payments or freeze your account temporarily.
7. Prevent online impulse buying. Remove auto-fill information from your browser for online stores.
8. Set aside money for unexpected bills. Build an emergency fund to avoid financial stress.
9. Download the Mental Health and Money Toolkit. This free resource can help manage both financial and mental well-being. Also, the Money Midlife MOT tool can help you assess your current financial situation and plan for the future towards retirement.
10. Seek professional support. Organisations like Citizens Advice Bureau and StepChange provide invaluable help for people struggling with debt.
Bocca explained that PayCaptain offers various tools to support employees in managing their finances, including benefits entitlement checkers, payment splitting, and access to on-demand pay through their Emergency Cash service. This service allows employees to access a portion of their earned wages before payday, helping them avoid high-cost credit and meet immediate financial needs.
“Offering solutions and support to improve financial well-being is vital for both employees and employers,” Bocca said. “By addressing financial stress, businesses can reduce absenteeism and increase morale and productivity.”
In addition to PayCaptain’s services, several organisations offer support for individuals dealing with debt, including the Money and Pensions Service, StepChange, the National Debtline, GamCare, and Surviving Economic Abuse.
Financial stress remains a significant issue in the UK, affecting not only personal well-being but also workplace performance. As awareness grows, both individuals and employers are being urged to take steps to address this widespread problem, offering a chance to improve not just financial health, but also job satisfaction and productivity.
