Brexit and ‘zero hours’ contracts undermining financial wellbeing of UK workers

zero-hours contract

The research also found that two fifths of HR directors think that their employees would approach them for financial assistance when in reality only 3 per cent said they would turn to either party for help. Whilst they feel uncomfortable about approaching their employer, they are looking to employers to offer support and help.

The findings shows that employee financial confidence has fallen over the last 12 months, with Brexit named as a major factor. The survey highlighted that 35 per cent have changed their view on their finances following the UK’s decision to leave the EU.

The survey also found that 48 per cent of workers are borrowing money to meet their basic financial needs.  This rises to two thirds of workers under 34 years, with 26 per cent borrowing on a credit card, followed by a 7 per cent through a bank loan  and 13 per cent via an overdraft..

An increase in so-called zero hour contracts means that a quarter of UK workers have an income fluctuation of more than 10 per cent each month, increasing to 45 per cent for those aged 18-24.  This is significantly undermining people’s ability to manage the money on a day-to-day basis, budget, plan and save.  More over this fluctuation in income is contributing to financial exclusion due to an inability to access cost effective financial products.

With mental health currently high in the public consciousness, research has revealed that a third of workers suffer from financial stress, down from 45 per cent of respondents in 2016.

Monica Kalia, Co-Founder and Chief Strategy Officer of Neyber said: “At a time when personal finances are under increasing pressure, employers have a duty to offer greater support to their employees.  We are calling for more companies to provide a facility to allow employees to have access to financial education tools, saving facilities and access to low cost loans. Financial wellbeing should be included in every company’s employee engagement strategy.  It’s the right thing to do and a financially resilient workforce can only be positive for the company and the UK economy as a whole.

Kalia continues, “The good news is that more businesses realise that staff with financial worries also struggle at work and firms are waking up to ways to help them.”

The report also highlights a divergence between employer engagement around financial wellbeing and the wishes and needs of their workers.  For instance, two fifths of workers think that their employer fails to communicate anything to do with financial support.  This contrasts with 56 per cent of businesses which rank themselves highly in this area.