REBA Inside Track: High earners are far more likely to suffer financial stress
I came across this shocking statistic at the LCP DC and Financial Wellbeing Conference earlier this week, where this data, based on the survey Employee wellbeing - the state of the nation's financial health, conducted among 10,000 employees at the end of 2021, was shared.
It’s bad enough that the research shows that about a fifth of people earning below £70,000 are in crisis or are vulnerable, but this shoots up to 64% of those in the £70k-£80k bracket; 41% in the £80k-£90k bracket; and 58% for those earning £90k-£100k. Even those earning more than £100k are faring worse than the lower earners.
I suspect, Dear Reader (as Lady Whistledown might say on the streaming series Bridgerton), these stats might be hitting home if you are a senior HR, reward or benefits professional. You may well be one of this majority within your income bracket.
If you are, this is no doubt causing you a huge amount of stress, it is affecting your sleep and it is affecting your work performance. No one wants that for you.
If you are not, then be aware that many of your friends, colleagues and peers will be dealing with this enormous financial stress. Perhaps all was fine before the pandemic, but now a partner is no longer working or has taken a salary drop. Or inflation has already started to play havoc with financial plans. Or a chronic illness is using up funds.
Whatever the reason, the drive to keep up the façade of financial stability – from driving a luxury car, living in an expensive area, to having children in private schools – can cause people to borrow too much, including using loan sharks and payday lenders (55% of these high earners do – it is not only a low earner habit).
We at REBA are seeing a distinct uptick in the interest in employee financial wellbeing programmes from our members – it is showing up across most of surveys we are running. So, if you are looking into the cost of living crisis and how to support staff, be very aware that the high earners need support too.
From a business point of view, they will be running teams, making decisions affecting a large part of your business, holding budgets and signing off spend. Are these really the people you want to also be buckling under personal financial stress?
Support through good quality financial education (not the type that leads only to a product sell) and advice, will be invaluable to help them find ways to exit this financial stress.
And finally … REBA is currently running a major survey into employee financial wellbeing. The more employers which fill it in the better the picture we can paint of how financial wellbeing is being offered in workplaces today, what trends are emerging and what future plans look like.
Please fill in REBA’s financial wellbeing survey.