Amidst Soaring Living Costs, Employee Financial Well-being in the UK Remains Neglected by Companies

Lack of support from employers is making it even more challenging for the UK's working class.

PUBLISHED FEB 15, 2024

Cover Image Source: Pexels | Photo by Yan Krukau

The cost of living in the UK has been rising significantly, and it has affected most of the UK’s working class. Employees eagerly anticipate guidance or benefits from their companies to navigate these challenges. However, recent research reveals that, regrettably, the financial well-being of employees is not a primary concern for most employers, exacerbating the financial crisis faced by employees in the UK.

Risk-taking capacity is affected as they want to be involved in everything|Pexels — Image Source: Employees are lacking support from their employers | Pexels

The research highlights the primary concerns of UK employees, with managing day-to-day living expenses being the most pressing issue for 36% of respondents. Moreover, 35% express worry about their future financial security, particularly concerning retirement affordability. Another 32% are troubled by escalating rental costs and the challenges of mortgage management.

Surprisingly, for employers, the financial well-being of their workforce ranks as the 12th priority, while providing support for living costs is only the 8th priority on their agenda.

Image Source:Pexels|Photo by Yan Krukau — Image Source: Pexels | Photo by Yan Krukau

Only a minority of employers are actively addressing their employees' financial challenges. Only 26% of companies provide holiday purchase/sellback benefits, while a mere 19% offer hardship loans. Interestingly, some benefits offered by companies are quite different from employee expectations. For instance, 55% of employers provide cycle-to-work schemes, which do not align with employees' preferences. Similarly, season ticket loans, offered by 33% of employers, fail to resonate with employees' priority lists.

Image Source: Pexels|Photo by MOnstera Production — Image Source: Pexels | Photo by Monstera Production

During financial crises, employees often seek financial advisory services from their employers. According to research, advice on financial well-being ranks as the fourth most important benefit employees expect, with 43% specifically seeking guidance on pension funds and 36% desiring general financial advice. However, only 22% of companies provide financial advice and support for retirement plans, indicating a significant disparity between employee expectations and company offerings.

Jeanette, head of Workplace Financial Wellbeing, commented on this mismatch, stating, "It is increasingly clear that workplace benefits and financial wellbeing programs have failed to keep pace with these shifts." She emphasized the importance of aligning workplace benefits and well-being programs with employees' needs, particularly given the significant influence of financial well-being on mental well-being.

A city office employee works into the night as darkness closes | A city office employee works into the night as darkness closes in on October 10, 2005 in Glasgow, Scotland. Seasonal affective disorder (SAD), or winter depression, is a mood disorder related to the change in the seasons and the resulting reduction of exposure to daylight. The end of British Summer time, when clocks go back one hour at the end of October, will see most people making their daily commute in darkness both ways. With winter nights stretching to 19 hours in the UK, and Scotland's often inclement weather, it is estimated that the — Image Source: Getty Images | Photo by Christopher Furlong

Inflation alone cannot account for the soaring cost of living in the United Kingdom. The country is consistently ranked among the most expensive places to live, with steep prices across various sectors. Several factors contribute to this phenomenon, driving up living expenses.

Skyrocketing Housing Costs: Purchasing a house in the UK remains extravagantly expensive, topping the expense list for citizens. Recent data reveals that the average house price surged from £286,000 ($359,373) to £314,000 ($394,556) in 2022, marking a significant 9.6% increase. This exorbitant amount renders homeownership unattainable for many, exacerbating the challenge of making ends meet.

Inflated Grocery Prices: Grocery shopping in the UK only adds to the financial strain of living in a costly and unfamiliar country. With meal delivery services often unaffordable, residents are left with no choice but to opt for grocery purchases. However, even this option proves to be expensive, with the average weekly food bill for a family of four surpassing £108 ($135) and reaching a staggering monthly total of £708 ($889).

Transportation Expenses: Limited public transportation options compel individuals to rely on personal vehicles for commuting. However, the high prices of gasoline pose a significant financial challenge for residents. Moreover, petrol prices have surged to 191.53p per liter, significantly increasing the overall cost of living in the country.

Soaring Utility Bills: Utility expenses, including gas, electricity, and water bills, constitute unavoidable monthly or quarterly payments for households. Despite being consumption-based, electricity costs in the UK have skyrocketed, with the average household electricity bill reaching £700 ($879).