You are currently on our UK website

How can we help?

Salary, spending habits and financial wellbeing

In our 2018 financial wellbeing research, we explored the financial attitudes and behaviours of over 10,000 employees and how this affects their wellbeing. We asked whether or not they had worries in the following areas of their life: relationships, health, career and finances. Money worries were consistently the greatest contributor to overall stress levels.


We found that this financial stress was having a hugely negative impact on businesses as well as individuals:


  • Productivity: People with money worries are 8.8 times more likely to have sleepless nights, lose 3.6 working hours a week to stress and are 7.6 times more likely to not finish daily tasks.
  • Conflict: They are also 5.7 times more likely to have troubled relationships with colleagues.
  • Absenteeism: They take 1.5 sick days a year due to financial stress.
  • Retention: Additionally, they are 2.2 times more likely to be looking for a new job.

What is causing this poor financial wellbeing?

There are many potential causes for financial stress – struggling with debt is the most obvious example.


However, many people simply find budgeting throughout the month to be a challenge, and this is keeping them in a cycle of short-term, expensive debt.


The average employee is forced to use payday loans, credit cards or overdrafts to get them through to payday for four out of every 12 months. 10% said this is the case every month. Our own research found that 34% of people regularly run out money before payday.


A continual sense of almost running out of money has a negative impact on financial wellbeing. Regularly running out of money and financial stress are strongly correlated. What was most interesting is that this is true across all salary bands. Higher pay does not protect people from lower financial wellbeing.


It’s not the amount you get paid, but what you do with it, that determines your level of financial wellbeing.

If not salary levels, then what is it?

Clearly, there is a large group of people struggling to budget between paydays.


To understand this in more detail we developed a Financial Fitness Score from 1 (not in control) to 5 (financial freedom) as a diagnostic to measure an individual’s level of financial wellbeing.


The score is determined by ten questions about their attitudes and behaviours in relation to how they save, borrow and spend money.


It is true that there are more lower paid individuals getting a Financial Fitness Score of 2 than a score of 4. However, it isn’t as simple as more money equalling a higher score, and better financial wellbeing. Almost a third of people getting a score of 4 earn less than £25k pa and 25% of the people getting a score of 2 earn more than £40k pa.


So what is influencing financial wellbeing?

One interesting discovery is that the distribution of Financial Fitness Scores is bi-modal. There are large spikes at 2 (no freedom to enjoy) and 4 (plan in place).


The distribution of scores across the UK population is:


The responses of these two groups show very different levels of knowledge, attitudes and behaviour when it comes to money. Although they are all employees of UK businesses, in many ways they are two quite distinct groups of people.


We saw earlier that regularly running out of money before payday and money worries are highly correlated. This is also evident when viewed through the lens of the Financial Fitness Score. This indicates the positive impact that could be achieved by helping employees improve their financial wellbeing.



This is quite shocking when you consider that a third of your workforce are likely to score 1 or 2.


What employers can do

Our survey showed that financial knowledge and behaviour varied depending on an individual’s Financial Fitness Score.


The ability to access what you have earned before payday can simplify budgeting and help avoid a situation where someone is running out of money before payday. This can help them move out of cycle of relying on debt to make it through the month, for example:


  • Dealing with emergencies: For the 16.8 million people with less than £100 in savings, something as commonplace as a car repair can cause a financial challenge.
  • Controlling pay frequency: Falling back on expensive credit increases by 18% when there is less alignment between the timing of when pay comes in and bills go out.

As part of a financial wellbeing strategy that includes savings, education and affordable borrowing, more flexible access to pay can provide a foundation for improved money management and financial wellbeing.


Get in touch to find out how we can help you improve the financial wellbeing of your employees.

The browser you are using is outdated. For the best experience when browsing this site, please update your browser to the latest version.