Two thirds of UK workers say that since lockdown ended they are now wasting an additional £100 a week on ‘unnecessary luxuries’, which is potentially damaging their financial wellbeing.
Despite this over a third of workers said their financial health had improved during the course of Covid-19. However reliance on high-cost credit for basic purchases is still high among workers of all ages across the UK.
However, the return to normal life is also bringing with it a sudden, sharp rise in costs that had disappeared for many during lockdowns with 61 per cent of UK workers now increasing spending on alcohol, shopping, eating out and other luxuries post-lockdown.
The research was conducted as part of Hastee and financial health platform Sapio as part of its annual Workplace Wellbeing study.
For many workers, the pandemic delivered devastating blows to livelihoods, sources of income and hard-earned savings. Hastee’s research found that 56 per cent of the workforce claim to have changed their spending habits since the outbreak of Covid and 43 per cent say it has affected their work behaviour.
However many workers are still struggling to make ends meet, with nearly half (46 per cent) of respondents claiming to live ‘payday to payday’ and 63 per cent of respondents applying for high-cost credit options knowing they would struggle to make the repayments, but felt it was their only option.
The latter number is up from 59 per cent in 2020, which was itself a 20 per cent increase on the previous year. This is compounded by the discovery that over a quarter (29 per cent) of UK workers have increased their use of high-cost credit during the pandemic.
The 2021 study also dispels the belief that high-cost credit use is most common among lower income groups, with respondents earning between £40,000 and £75,000 a year most unlikely to clear their debts every month (20 per cent). In addition, those earning over £75,000 a year were the most likely to have increased their use of high-cost credit (28 per cent) when compared to last year.
Hastee’s founder James Herbert says: “For some UK workers, the reduced opportunities to spend money and removal of their commute to work has had a tangible positive impact on their finances. For many others, the last year has forced them into even more precarious financial positions; living from payday to payday and increasing their reliance on high cost credit.
“As we come out of lockdown restrictions and more people return to pre-Covid norms, people’s finances are not keeping up.
“Now is a pivotal time for people’s financial health. Employers can and should support the financial health of their staff through education, greater financial flexibility and the tools to manage their outgoing expenditure with their incoming salary in real-time. Financial health should be considered just as important as any other workplace wellbeing initiative, and it’s a reality that is slowly taking shape.”
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