A new study entitled Working Well: How employers can improve the wellbeing and productivity of their workforce, from the Social Market Foundation (SMF) think-tank conducted in partnership with financial employee benefits provider Neyber, finds that one in eight workers (13%) report that money worries have affected their ability to concentrate at work.
The study shows low financial resilience is a significant cause of stress across the UK workforce:
- One in eight (13%) workers say money worries hinder concentration
- A quarter (24%) are just about managing financially
- The number of workers reporting financial difficulties over the last 10 years has doubled
Katie Evans, SMF economist and report author, says:
“The UK’s workforce lacks financial resilience. It’s clearly affecting our ability to concentrate at work and blunting our productivity.
“This low financial resilience is a problem across industries – and it’s getting worse. The proportion of workers reporting that they face financial difficulties nearly doubled over the decade to 2013/14.
“These money worries have a clear impact on how people feel and behave as they go about their day-to-day lives and jobs.”
Key findings:
- Four in ten workers (40%) say money worries have made them feel stressed over the last year
- A quarter (24%) are just about managing financially
- A quarter (25%) say they have lost sleep over money worries
- Nearly 50% of workers (48%) are not putting any money aside for anything more than regular bills
- One in eight workers (13%) report that money worries have affected their ability to concentrate at work
Monica Kalia, co-founder of Neyber comments:
“These findings should provide a wakeup call for UK employers because they clearly demonstrate how productivity is impacted by factors such as stress and anxiety, with both driven by financial worries. The fact that these issues are apparent across all sectors of the economy means that we have consistently failed to recognise some of the key drivers of poor productivity in the UK economy.
“For far too long politicians, policy makers and economists have chided Britain’s workforce for its failure to improve productivity without taking account of the wellbeing factors that can affect employees. This clearly has to change if we are to continue to emerge from the recession with a workforce that is fit to deliver economic growth at home and meet the competitive challenge in global markets.”
Surprisingly, workers in relatively well-paid industries also have low levels of savings and lack financial resilience. The report suggests ways of tackling the problem – Katie Evans, the author of Working Well, comments:
“Employers need to help their staff to learn healthy financial behaviours and build financial resilience. As poor financial resilience affects all income groups, the answer isn’t just higher levels of pay.
“Workplace pensions have already been introduced to build financial resilience later in life. One option is to extend auto-enrolment policies to include short-term savings or income protection insurance as well as pension savings. However, auto-enrolment programmes are difficult to design and take a long time to organise.
“New financial mutuals, providing affordable savings and credit products using bonds of trust between those in particular professions, could be one way of building a culture of financial resilience through the workplace.
“Tax incentives are already offered on some workplace savings and investment programmes, but only the largest employers are usually able to make these schemes available to their workforce. Extending these privileges to new workplace savings schemes would increase the number of workers who can benefit and maximise the number of households able to build financial resilience by saving through their payroll.
“Firms could also consider simple changes, like printing a recommended monthly savings goals on payslips or offering budgeting applications alongside online payroll to help improve the financial capability of their teams”.
-ENDS-
NOTES TO EDITORS:
For details of how the analysis for this paper was carried out, see Annex 1 at the end of this note.
For further details regarding the Social Market Foundation please contact: David Mills, SMF director of communications – david@smf.co.uk. The report author, SMF economist Katie Evans, is available for interview.
For further details regarding Neyber, please contact: Bev Aujla/ Cat Barratt, Lansons 0207 294 3683 / 07976 204 378 / 0207 294 3674 / 07870 397 524 Monica Kalia, co-founder of Neyber is available for interview
About The Social Market Foundation:
The Social Market Foundation is an independent, cross-party think-tank which seeks to marry pro-market solutions with social justice. The research and report was conducted in partnership with Neyber, a provider of financial employee benefits enabling employees to reduce their borrowing costs with access to affordable loans integrated with payroll.
About Neyber:
Neyber is a provider of financial employee benefits. We enable employees to reduce borrowing costs with access to affordable loans integrated with payroll – all at no cost to the employer.Our mission is to pioneer the creation of workplace communities that will enable employees to borrow and save together at fairer rates and to cut credit costs.
As Neyber’s technology integrates with payroll, employers can offer an easy-to-implement workplace financial solution that acts as a key driver for employee engagement, productivity and to reduce stress-related absenteeism.
Over half a million people already have access to the Neyber community. Through our affordable rates, we have delivered an effective 5% pay rise to our existing borrowers saving them 20% on monthly debt repayments and successfully reducing their outstanding debts.
ANNEX 1 – Details of research:
The original data analysis presented in this report is based on Understanding Society, a large-scale longitudinal study of UK households. Over 40,000 households are interviewed every year to gather information on health, work, education, income, family and social life in the UK. We also draw on Understanding Society’s predecessor, the British Household Panel Survey. Both of these datasets are weighted to be representative of the UK population.
This research draws on two waves of Understanding Society data – Wave 4, collected in 2012/13, and Wave 5 collected in 2013/14. Where possible we have used the more recent Wave 5 data (all questions on financial wellbeing, stress etc). However the data on wealth, assets and debt is a discrete module which is only available in certain waves. Thus for the information presented on savings and debt, we have used Wave 4, the most recent set of data to contain this information.
In Understanding Society pensions savings is discussed separately, so all figures for savings from this source are for non-pension saving – both long and short-term. Respondents are specifically prompted to consider savings in: savings or deposit accounts with a bank, post office or building society, National Savings Accounts, cash ISAs, stocks and shares ISAs, PEPs, Premium Bonds and other savings accounts.
The results presented here are in each case for all those in work. We do not consider those who are unemployed, working for the family at home, studying full-time or retired. This gives us a sample in Waves 4 and 5 of Understanding Society of approximately 27,000.
Industry categories are based on SIC07 codes. We present information for all the UK’s main industries. Information for two categories, Activities of Households as Employers and Activities of Extra-Terrestrial Organisations,are not included as sample sizes are too small for results to be reliable. In each diagram we also present the average across all industries, which represents the average worker.
For some individuals’ specific pieces of data may be missing – they have refused to answer a specific question for example. In this study, we do not attempt to imput these missing values but rely on the data available, given the sizeable data set.
Building on work by Broughton, Kandar and Martin (2015), In this paper, we look at individual-level data on debt and assets. Our construction of individual-level holdings is built from:
1) Holdings that the respondent says are held individually
2) A share of the holdings that are held jointly. The share of joint holdings is estimated by dividing the relevant figure by household size.
Difficulties arise in constructing individual-level measures of debt and wealth within households when data for one person in a couple is missing, or when household members give conflicting answers on the savings and debts they hold jointly. To overcome these, and in line with our previous analysis of this data presented in Wealth in the Downturn (SMF,2015), we apply the following rules:
• If both partners agree that they have no shared debt/wealth, or agree on the amount of shared debt/wealth, we use this amount without further modification.
• If both partners say they have shared debt/wealth but the amounts conflict, we take the mid-point between the two amounts.
• If one partner says they have an amount of shared debt/wealth, but the other partner says they do not share any, we take the mid-point between the reported amount and zero.
• If one partner gives information on shared debt/wealth (whether they have it or not, and the amount), and the other partner does not respond to the questions, we take the data from the partner who responded.
Additional data is presented from a Neyber opinion survey, carried out with Opinium between 30 November and 7 December 2015. The total sample size for this survey was 5,053. Data was collected through an online survey, has been weighted and is representative of all GB adults in
work aged 18+. The unemployed, full time students, those working in the home and retirees were excluded from the sample.
We also use data collected by YouGov for Neyber in January 2015. The total sample size for this survey was 8,879 adults, but results reported here are limited to those in work. Data was collected through an online survey, and was weighted to be representative of all GB adults aged 18+.
Where statistics from these public surveys are quoted in this report, we also provide sample size and a description of the base.
