Worsening debt sparks renewed concern over employee wellbeing as cost of living stings

  • Four in five (79%) UK employees are concerned about the rising cost of living, and one in three (34%) are barely coping financially
  • Nearly a third (30%) of low-income earners believe that current debt levels are hurting their well-being
  • One in three (34%) believe they are no longer prepared for unforeseen life circumstances, including accidents, serious illness or layoff
  • Half (50%) say their current financial situation is affecting their mental health

Four in five employees in the UK are concerned about continued increases in the cost of living (79%), according to new research from Aviva which shows the over 45s are collectively the most affected.


The fourth edition of the insurer’s magazine The Age of Ambiguity A study, which tracks employees’ work experiences since before the Covid-19 pandemic, shows how socio-economic uncertainty and financial pressures are impacting people’s well-being.1


His findings show that feelings of financial distress were widespread even before the economic and political upheaval that intensified over the fall.


Among low-income employees – those earning less than £30,000 – almost a third (30%) say their current level of debt is hurting their wellbeing. All wage brackets combined, the number of employees who feel this way has increased sharply from one year to the next, rising from 26% in 2021 to 34% in 2022, among companies with more than 1,000 employees.


Aviva’s findings also highlight a gender divide in the experience of financial well-being. Across all age and income groups, less than half (49%) of women would describe their financial well-being as good, compared to 67% of men. Women are also more likely than men to be concerned about their finances in light of the rising cost of living (81% to 76%).


Households more exposed to hazards


The report shows that financial well-being – defined as “a sense of security stemming from the feeling that you have enough money to meet your needs” – fell significantly among workers with household incomes below £36,000.


Three quarters (75%) of all employees who have suffered a drop in income report feeling additional stress as a result.


One in three (34%) feel they are no longer prepared for unforeseen life circumstances, including accidents, serious illnesses or layoffs that could affect them or their family. Worryingly, it is increasing 50% for employees with low personal income (less than £30,000 a year), suggesting that individual salaries are often no longer sufficient to cover unexpected events.


Financial uncertainty weighs on mental health


Aviva’s study also explores how employers can strike a balance between providing greater duty of care to employees in an increasingly challenging environment, while taking steps to future-proof their business.


Half (50%) of all employees say their financial situation has a negative impact on their mental health, with those earning up to £24,000 a year most likely (60%) to think their finances have a negative impact on their mental health .


Across all income groups, two in three (66%) employees feel that managing their finances has become more difficult lately, as economic pressures have gradually started to affect households.


The report examines the role employers can play in helping employees manage their personal finances and financial well-being, recognizing that anxiety related to economic concerns is complex and individual. An open conversation about money and available signage support will help ensure that a range of people of different incomes, ages, genders and other groups are supported.


Employers can also provide support for the broader mental well-being of employees to help them build resilience and be better equipped to deal with money issues if they arise. This support can take the form of employee assistance programs or providing mental health and wellness apps, but most importantly, providing a culture where employees feel able to talk about mental health without fear of discrimination. or judgment. To help create this culture, companies should consider training that equips line managers with the key skills to recognize when their team members may need support.


Dr Doug Wright, Chief Medical Officer at Aviva UK Health, comments: “The relationship between debt and mental health has long been established, but in these difficult times, employers must pay close attention to the financial well-being of their employees, signaling help to those who need it but don’t know. no where to find it.


“Being financially responsible does not necessarily guarantee stability – even for those experienced in budgeting, the current cost of living crisis presents new challenges for their personal finances. Employers should seek to offer support that builds employee confidence, as well as practical solutions that appeal to all of their employees.


“Workplace education campaigns on personal finances, including credit scores and budgeting, can be a great way to help people feel more secure with their monthly paychecks. Aviva’s learning portal offers seminars on a range of financial topics. Equally equally important. »


-ENDS-


Methodology


Research of 2,000 UK employees working in organizations with more than 1,000 employees was independently conducted on behalf of Aviva by Quadrangle in February 2020, August 2020, March 2021 and June 2022. All figures do not add up not 100% due to rounding throughout the report. .


Sources


1 The latest wave of research for The Age of Ambiguity was carried out in June 2022.


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Remarks

  • We are the UK’s leading insurance, wealth management and pensions company and operate in the UK, Ireland and Canada. We also have international investments in Singapore, China and India.
  • We help our 18.5 million customers get the most out of life, plan for the future, and know that if things go wrong, we’ll be there to fix them.
  • We’ve been caring for people for 325 years, consistent with our goal of “with you today, for a better tomorrow”. In 2021, we paid out £30.2 billion in claims and benefits to our customers.
  • Aviva is a market leader in sustainability. In 2021, we announced our intention to become a net-zero carbon company by 2040, the first major insurance company in the world to do so. This plan means zero net carbon emissions from our investments by 2040; define a clear trajectory to achieve this with a 25% reduction in the carbon intensity of our investments by 2025 and 60% by 2030; and net zero carbon emissions from our own operations and supply chain by 2030. To learn more about our climate goals, visit www.aviva.com/climate-goals and our ambition and our action in terms of sustainable development www.aviva.com/sustainability
  • Aviva is a living wage and living hours employer and offers industry-leading benefits to our employees, including flexible working, paid caregiver leave and equal parental leave. Learn more at https://www.aviva.com/about-us/our-people/
  • As of June 30, 2022, total group assets under management within Aviva Group were £353 billion and our Solvency II excess capital as of September 30, 2022 was £8.8 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 Index.
  • For more details about what we do, our business and how we help our customers, visit www.aviva.com/about-us

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John A. Bogar