Over 2.5 million private-sector workers have taken time off in the last 12 months due to poor financial wellbeing, resulting in a total of 13 million days off work, according to Aegon.
The impact of the cost of living squeeze on employers has been revealed in new research conducted by CEBR on behalf of Aegon UK. It found that workers’ financial wellbeing is impacted by surging inflation, interest rate hikes, and growing day-to-day expenditures. The younger generation is more likely to miss work owing to financial concerns, with 58 per cent of those under the age of 34 taking time off.
Employee absenteeism owing to financial concerns has an economic impact on businesses, with the average cost to employers for each day lost due to financial anxiety being £192. The cost of this workforce absenteeism to UK companies is estimated to be around £2.5bn per year according to Aegon.
Employers are being impacted by low productivity as a result of poor financial health, with 4.9 million employees reporting a drop in output over the last two years due to financial concerns. Nearly 15 per cent report to being frequently distracted at work by money problems, with 45 per cent admitting that this happens occasionally. In comparison, only 11 per cent said they were worried about their health.
According to research, one in every five workers has suffered a drop in productivity due to financial issues in the last two years. This climbs to 52 per cent for those under 35, compared to slightly under 8 per cent for those over 55.
Aegon managing director Linda Whorlow says: “The last two years have undoubtedly been the most unpredictable and unprecedented times that most of us will experience in our lifetime and this has unquestionably impacted individuals personal finances and in turn financial wellbeing. Our research uncovers the impact that the financial worries of workers is having on businesses with a staggering number of workdays lost and an unexpectedly high number of staff experiencing poor productivity as a result of financial concerns.
“We have seen an increased focus on financial wellbeing in recent times and this new analysis shows that now more than ever, employers must take the financial wellbeing of their employees seriously. Many workplaces offer staff benefits to address physical wellbeing such as gym membership, but it is vital that businesses shift their mindset to support the financial wellbeing of workers. Workplaces can differentiate themselves in this area by offering staff relevant, straightforward and engaging content to support them to achieve their financial goals, be it saving for the future or paying off a credit card or loan.”
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