New research from Hastee Pay has found that workers in the UK and Ireland are five times more likely to use high-cost credit in January compared to December as workers are left to endure a five or six-week wait for their January pay packets.
Adding to their woes, workers on a monthly pay cycle are twice as likely to use short-term credit in comparison to those paid weekly. Those who are paid monthly are also seven times more likely to use their overdraft in January rather than December. The findings suggest that more frequent access to pay has a positive impact on workers who would otherwise have to rely on borrowing and potentially fall into spiralling debt.
58% of workers reported having to cutback on their spending to cover the costs that arise at Christmas time. From buying gifts and attending more social events than usual, to the expenses that aren’t so obvious including the cost of additional travel over the festive period, workers are struggling to balance additional spending with everyday expenses between December and January.
The study also found that 35% of workers say their finances leave them feeling anxious or stressed most of the time while just under a quarter of workers (24%) have difficulty concentrating at work due to financial stress. More worryingly, 26% say financial stress leaves them feeling on the edge, mentally and physically.
The struggle to concentrate and feeling on the edge both mentally and physically are highest among younger workers (18-24) and those earning under £30,000. A previous Hastee Pay study* uncovered a direct link between financial stress in the workforce and poor business productivity impacting the bottom line.
To balance their incomings with their outgoings, 48% of workers work overtime to save extra money before the Christmas period and this is more of a requirement for those aged 18-24. Gone are the days of the Christmas bonus with now only 23% of employers offering financial incentives to help out.
“What’s intended to be a wonderful time of the year can be financially crippling for so many hard-working people,” says James Herbert, Hastee Pay CEO. “It’s not that the spirit of Scrooge is alive and well in businesses today, it simply comes down to the fact that many companies aren’t fully aware of the financial strain experienced by workers across all salary bands. It’s not just Christmas that employers need to be aware of – January is arguably a more stressful time in terms of financial health as employers are unwittingly putting their staff under further strain by paying them in full earlier in December, therefore making them wait for up to 6 weeks for their next pay day in January.
“Our research has revealed that this financial strain isn’t just focussed on Christmas and January, but throughout the year, as 87% of workers have had to cover unexpected costs in the last 12 months. Consideringt he links between financial wellbeing and workforce productivity, businesses offering flexible pay could also see a healthy impact on their bottom line.”
*Hastee Pay WorkplaceWellbeing Study 2018: https://www.hasteepay.com/workplace-wellbeing-study-hastee-pay/