Nearly two thirds (61%) of UK workers say they waste an extra £100 each week on booze, shopping, and other ‘unnecessary luxuries’ since lockdown ended, according to new data released today by Hastee.
The research, produced in collaboration with Sapio, which surveyed 2,000 workers as part of the financial health platform’s 2021 annual Workplace Wellbeing Study*, also found that, over a third (34%) feel their financial health improved during the course of COVID-19. Despite this, reliance on high-cost credit for basic purchases and necessities is still rife among workers of all ages across the country.
For many workers, the pandemic delivered devastating blows to livelihoods, sources of income and hard-earned savings. Hastee’s research found that 56% of the workforce claim to have changed their spending habits since the outbreak of COVID-19, and 43% say it has affected their work behaviour.
Positively, over a third (34%) of respondents believe the impact of the COVID-19 pandemic has benefitted their overall financial health. Taking a regional look at this data, workers in London were the most likely (42%) to state this, followed closely by 38% in Northern Ireland, and 35% in the North East of England.
In stark contrast, however, the return to normal life is also bringing with it a sudden, sharp rise in costs that had disappeared for many during lockdowns. 61% of UK workers admit ‘wasting’ up to £100 per week on alcohol, shopping, eating out and other luxuries post-lockdown, with 25-34 year olds in the West Midlands, Scotland and Wales most likely to admit this.
Many are still struggling to make ends meet, withnearly half (46%) of respondents claiming to live ‘payday to payday’ and 63% of respondents applying for high-cost credit options knowing they would struggle to make the repayments, but felt it was their only option. The latter number is up from 59% in 2020, which was itself a 20% increase on the previous year. This is compounded by the discovery that over a quarter (29%) of UK workers have increased their use of high-cost credit during the pandemic. Respondents report that the highest ranking reasons for this reliance has been to both pay bills on time (19%) and make essential purchases like food (17%).
The 2021 study also dispels the belief that high-cost credit use is most common among lower income groups, with respondents earning between £40,000 and £75,000 a year most unlikely to clear their debts every month (20%). In addition, those earning over £75,000 a year were the most likely to have increased their use of high-cost credit (28%) when compared to last year.
The good news is that more and more awareness is growing around flexible pay as a means to promote good financial health: 40% of respondents believe that flexible pay options would help them to stop relying on high-cost credit. From the perspective of employers, better financial fitness can alleviate stress, increase worker productivity and bolster staff retention, with 60% of workers more likely to stay with an employer that offers flexible payment options. Despite this, nearly 46% of respondents suggest that their employer offers no form of employee benefits for their physical, mental or financial health.
Hastee’s founder James Herbert said: “For some UK workers, the reduced opportunities to spend money and removal of their commute to work has had a tangible positive impact on their finances. For many others, the last year has forced them into even more precarious financial positions; living from payday to payday and increasing their reliance on high cost credit all the while knowing they will struggle with repayments. As we come out of lockdown restrictions and more people return to pre-COVID norms as well as to commuting to their place of work more regularly, people’s finances are not keeping up.
“Now is a pivotal time for people’s financial health. While we are seeing positive change with a growing awareness of the perils of high cost credit and the terrible impact financial stress is having on many people’s lives, far too many are left with little choice and are denied the opportunity to make more constructive long-term financial decisions. Employers can and should support the financial health of their staff through education, greater financial flexibility and the tools to manage their outgoing expenditure with their incoming salary in real-time. Financial health should be considered just as important as any other workplace wellbeing initiative, and it’s a reality that is slowly taking shape.”
For more information on Hastee’s award-winning earnings on demand technology, please head to: www.hastee.com