Almost nine in 10 employees are worried about paying for basic living costs, and four in 10 ‘live payday to payday’, according to new research.
WTW’s 2024 Global Benefits Attitudes Survey found that 40% of employees felt they were worse off financially compared with a year ago, up from 24% in 2019.
Employees ranked food (77%), housing (71%), transportation (71%) and interest charges (66%) as their main cost concerns, and almost six in 10 said worrying about costs was negatively affecting their mental wellbeing.
Almost half (45%) said they were not on the right track in regard to their finances, and 28% felt their situation would worsen over the coming year.
Employee living costs
Less than a third to award above-inflation pay rises in 2024
Although inflation hit the Bank of England’s target of 2% last week, living costs still preoccupy employees as pay awards remain under 5%.
Concerns about the current cost of living are also fuelling uncertainty about retirement plans, WTW found.
Thirty-nine per cent of respondents over 50 now expect to work past the age of 70, up from 27% two years ago, and 31% prior to the pandemic.
Almost eight in ten of all workers admit they are not saving as much for retirement as they should be, and less than half (47%) feel they are on the right track to retirement.
Helen Gilchrist, head of defined contribution consulting at WTW, said: “High inflation combined with the aftermath of a once in a generation pandemic is causing many employees to feel overwhelmed and discouraged about their financial situation, which is affecting overall wellbeing.
“Employers should take action to improve financial wellbeing within their organisation: adequate education for employees to help plan their resources and close financial gaps, as well as connecting employees with relevant elements of their total rewards package.”
WTW’s report follows a similar report by Wealth at Work last week, which found that two-fifths of employees do not think they will be able to afford retirement.
Both surveys found that many employees feel they do not receive enough support and communication on financial wellbeing from their employer.
WTW’s research found that 59% of employees thought that financial wellbeing is the area they want the most support from their employer in the next three years.
However, only 24% of employers rank this as a high priority wellbeing programme, according to previous research from the organisation.
Gilchrist added: “Employer retirement programmes, and specifically defined contribution plans, remain the primary path for employees to save for retirement.
“With challenges meeting their day-to-day expenses while still planning for retirement, employees are looking for help from their employer to build a retirement nest egg, but they also report needing flexibility for emergencies and a desire to maximise their benefits.
“Yet, there is a clear disconnect in priorities between employers and employees. Employers have an opportunity to align their focus with employee value, cost pressures, and talent objectives to address how their benefit programmes align to retirement and financial wellbeing initiatives.”
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