The costs of employee financial wellbeing to employers

Financial stress is embedded across the workforce. Employees are facing the perfect storm of cost pressures, low financial resilience and reliance on credit, which create financial pressures, that impact on their ability to perform effectively. This is costing organisations thousands of pounds each year.

Employees are facing the perfect storm of cost pressures, low financial resilience and reliance on credit, which create financial pressures, that impact on their ability to perform effectively. This has adverse impact on organisation's employee wellness strategies and culture as well as direct cost impacts due to unplanned absences, unproductive workers, high of churn of financially stressed employees and re-hiring and onboarding costs.

What's happening?

Day to day pressure on household budgets is growing with:

• only 54% of UK workers saying they can keep up with bills without difficulty (CIPD).
• 52% of adults "struggle to keep up / are falling behind / have fallen behind" with bills (MoneyView).
• And over 40% of employees reporting experiencing financial stress (PwC).

Low financial resilience and weak buffers is widespread with 53% of people unable to last three months or more without borrowing if they lost their main source of income and 26% of people couldn't afford to pay an unexpected bill of £300 from their spare money or savings (MoneyView).

Demand for help is rising with 2,670 people per day seeking help with debt in the first week of 2026 (Citizens Advice).

Reliance on debt is visible as 19% often use a credit card, overdraft or borrow money to buy food or pay bills (MoneyView) and The Money and Pensions Service estimates 7.3m people (14% of the population) need debt advice with a further 11.7m at risk of needing debt advice.

Financial stress is already reducing output, at a measurable cost to companies. It's visible in both time lost and reduced working capacity.

• 30% of employees say their finances have been a distraction and negatively affected their performance at work (CIPD).
• 46% of these admit to spending three hours or more a week at work dealing with personal finance issues (PwC).

That's almost 15% of your workforce spending three hours a week at work being unproductive.

Financial stress is also proven to drive absenteeism, costing businesses in lost hours and increased management costs. Managers spend an average of 4.2 hours a week dealing with unscheduled absence, such as task redistribution, providing cover, return-to-work processes (Weploy). This results in non-recoverable management time, additional operational disruption and a compounding cost across teams.

Financial stress is also increasing employee turnover. Employees under financial pressure are more likely to:

• Actively seek alternative employment: Employees experiencing financial stress are 2x more likely to be job hunting (PwC).
• Prioritise short-term financial gain over long-term fit: 40% of employees say they would move to a company that put financial wellbeing as a priority (PwC/Salary Finance)

The cost implications of this are significant.:

• Replacing an employee typically costs between 6-9 months of salary, rising to 100% for more specialised roles, when hiring costs, onboarding and lost productivity are factored in.
• For a £35,000 salaried employee, this equates to £17,500 - £35,000 per exit.
• Even small improvements in retention drive meaningful cost reduction at scale.

What does this all mean?

Financial wellbeing is a measurable driver of business performance, directly influencing:

• Cost: through absence, attrition and management overhead.
• Productivity: through lost time, distraction and reduced working capacity.
• Employer brand: through attraction, engagement and retention.

What should we do?

Many organisations are reviewing their people strategies, especially around their employee wellbeing, which as we have shown is significantly influenced by financial stress.

Employers are looking at developing tools and strategies to empower employees to take more control of financial wellbeing. This could be through:

• Implementation of enhanced workplace benefits.
• Benefits management platforms to bring all workplace benefits together in one place.
• Improved working conditions, holiday entitlements or flexible working hours.
• Fostering a positive workplace culture.
• Rewarding and recognising individual performance.
• Providing financial wellbeing support services (coaches, seminars, webinars).
• Helping employees find financial advisers and help plug the 'advice gap'.

The list of options are extensive and if you are a company worried about the cost of employee financial wellbeing to your business please reach out, we'd love to discuss.