Financial wellbeing - 40% of workers still living payday to payday

Two in every five workers in Ireland (40%) are living from payday to payday, despite believing their financial wellbeing is at its highest level since 2015. Financial concerns are impacting on employee health, relationships and causing worries about their future. These are the key findings of a survey of employees in Ireland by Willis Towers Watson (NASDAQ: WLTW) a leading global advisory and broking solutions company. Their Financial Wellbeing Report published today found that:

• For many, their financial situation has improved over the past four years with 48% expressing satisfaction with their financial situation (up from 40% in 2015)
• However, 40% are living payday to payday with no significant savings
• Moreover, 40% do not have enough savings to pay for household bills for the next 6 months if the need arose; and
• 31% have financial problems that negatively impact on their life.

Financial worries are causing a huge personal toll on employees’ health and wellbeing with struggling employees more likely have poor health.

• 44% of struggling employees saying they have suffered stress, anxiety or depression in the past two years.
• 31% of these employees also report poor health.
• 37% say money concerns keep them from doing their best work in their job
• 58% say that money concerns have strained their family relationships

Retirement Concerns

Employees also expressed concern for their financial wellbeing in retirement, perhaps reflecting recent changes to the age of retirement in Ireland.

• 70% of employees say they are saving less for retirement than they would like.
• 67% agree with the statement ‘my generation is likely to be much worse off in retirement than their parents’ generation are / were’.
• 69% believe social welfare will be much less generous than it is now when they come to retire
• 67% would be willing to pay a higher amount each month for a larger more generous retirement benefit (up from 53% in 2015).

David Glennon, Director in the Health & Benefits practice at Willis Towers Watson, said “Although we have recently seen salaries rise for workers in Ireland many are still struggling to meet their financial obligations. Nearly two fifths (40%) of struggling employees are earning €65,000 or more, so the issue is not necessarily one of income but rather a need for them to better understand how to manage their finances.”

“This research was undertaken before the COVID 19 crisis which is unfortunately bringing some of the findings into stark reality and fundamentally people are going to struggle financially. Our research shows that 40% of those surveyed do not have enough savings to meet household bills for six months if they took a significant hit to their income, sadly for many this scenario may well become all too real.”

Glennon also stated that; “In broader terms the results show that when one considers that 19 days are lost to absence and presenteeism by employees with financial issues, rising to 24 days annually for those with financial and health issues, financial management goes beyond the personal and has a significant and wider economic impact. Most companies understand the need to have robust wellness programmes in the workplace and they have implemented initiatives to help employees with their physical and mental health. Our research shows that in terms of absenteeism, stress and employee engagement, the impact of poor financial health is almost equal to that of poor physical health. More companies need to embrace the concept of financial wellness for their employees, not only will this help increase productivity, but it is also a gamechanger in terms of staff retention. Our Financial Wellbeing Survey gives us the insights and understanding to help employers design programmes to meet the needs of their employees.”

The report highlights steps employers can take to help employees with financial wellbeing including:

• Design benefits programs that connect with employees’ financial priorities.
• Provide tools and solutions that fit employees needs and that reflect the way employees make financial decisions.
• Leverage communication, education and social networks to support employee decision making.