Three ways to help employees manage their new year finances
Our findings
Our survey of 2,000 adults found that as many as one in six, equivalent to eight million, Brits expect to be ‘in the red’ by the middle of January; whether that’s from taking out a loan, using a credit card or dipping into their overdraft.
Over a quarter (27%) of those surveyed cited ‘money worries’ as the biggest contributor to the January blues each year, beaten only by the darker mornings and evenings (36%).
A whopping three quarters (76%) of those blame early paydays in December for their lack of funds at the end of the month. According to the survey, as many as 78% of Brits still receive a paycheque just once a month, with as few as 3% of people having the option to access their salary whenever they choose. What’s more, of those that expect to be ‘in the red’ by the middle of January, 71% are paid on a monthly basis, compared to only 22% who are paid weekly.
With an infrequent cashflow impacting Brits’ ability to manage their money, over a third (38%) of the UK admit to needing to borrow money before the end of the month, with 12% of people spending more than half their day worrying about their financial situation.
What the findings tell us
It’s clear from the survey that financial issues are amongst the most troubling when it comes to the middle of January. What’s also clear is that the majority of financial issues, such as the need to borrow money at the end of the month through payday lenders, credit cards and overdrafts, have come about due to an outdated system of monthly pay cycles and rigidity when it comes to pay. The early payday in December has only added to this issue, but obviously this isn’t something that’s unique to January, with almost 3.1 million people turning to payday lenders every year.
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Practical solutions
Free coffee, office yoga and fruit baskets are all great initiatives, but with money issues creating the most stress, employers can look to have the greatest impact through providing practical financial tools that have employee wellbeing at the very heart of what they do.
We’ve highlighted some practical steps employers can take to have a real impact on employee financial wellbeing and the business as a whole.
1. Talk about it
In the UK, we’re pretty shy when it comes to sharing our issues with others, especially when it comes to our finances. However, to learn that you’re not alone is often a great way to help people overcome it and strengthen relationships with others. At our office, we organise tea and talk sessions where we put away our phones and just talk to each other. We may not get straight to the issues at hand, but it helps to know that colleagues and senior staff are there if you do need them.
2. Give your employees flexibility with their pay
It’s clear that the monthly pay cycle can have huge knock-on effects for employees’ finances and wellbeing in general. Simply by providing them with visibility and access to a percentage of the wages that they’ve already earned, you can help to stop them from turning to negative and embarrassing forms of debt, and make pay a far more positive aspect of working life.
3. Build a programme that’s inclusive of all
We know that the trickiest part of the month is the period right before payday, where funds are low and payday lenders target their advertising more aggressively. That’s why a financial wellbeing programme that truly has employee wellbeing as its goal should be available to 100% of staff, 100% of the time, to ensure that people aren’t excluded from support when they most need it.
By supporting staff financial wellbeing you’re not only improving the lives of your employees, you’re also giving yourself a business advantage.
This article is provided by Wagestream.
In partnership with Wagestream
Wagestream’s financial wellbeing platform makes work more rewarding for 3 million people.
