Unfortunately, in recent years more people have faced money worries, which has highlighted the impact of financial wellbeing in the workplace. The annual growth in salaries slumped after the financial crisis in 2008. In 2000, household debt as a proportion of GDP was just over 60%. This increased to over 90% after the financial crisis and was still as high as 84.9% in 2022/23.
Since 2021, more people have faced financial problems because of the UK’s cost of living crisis. A combination of factors including the COVID-19 pandemic and the Russian invasion of Ukraine have led to major supply-chain issues, soaring energy costs, rising food prices, and the highest level of inflation for 40 years.
The net result is that more people are experiencing a squeeze on their household finances. This is particularly pronounced for younger people who are typically on lower incomes, many of whom will not have experienced such a decline in their disposable income during their lifetimes.
Poor financial wellbeing also has knock-on effects for the economy. Alarmingly, research by Neyber in 2019/20 concluded that money worries result in a £120 billion annual cost to the UK, and 17.5 million lost working hours. For employers, helping employees with their financial wellbeing could have a positive impact on their businesses.