Tackling the New Year employee overspend
Guest Blog By Ann Marie Bell, Director at Getta Sub
The New Year blues are a source of misery for many. Whether it’s the bad weather, dark mornings or financial overspend from the festive season, most employees are likely to have started 2019 out-of-pocket to some extent.
Whilst many will joke about over-indulging on drink, Christmas food and gifts, the reality is that, in financial terms, the post-Christmas period can be a stressful time. It can often result in substantial amounts of debt that consumers are unable to pay off or manage without external help, turning instead to credit cards or overdrafts.
One of the major problems with this approach is that not all debt can be paid off straight away and so therefore accumulates in the background, becoming a larger problem, leading to sleepless nights. The issue is clearly not going to go away, with a recent report conducted by The Money Charity revealing that in the UK, the average household had around £55,992 worth of debt (or £29,930 per person) however it is worth noting that this does include mortgages. When looking specifically at debt not including a mortgage, a separate survey by Comparethemarket.com found that the average person in the UK worryingly owes around £8,000.
To explore these issues further, we conducted a report which surveyed 2,000 UK workers around their attitudes towards personal finances and post-Christmas financial concerns. When compiling this report, we wanted to gain an insight into the financial concerns UK workers had after Christmas, the impact these issues had on their jobs and what they we’re having to do to attempt to resolve these issues.
To begin with, we asked whether those polled had over spent over Christmas and if so, how much by. The results concluded that over half (64per cent) had overspent overall and of that number, 29 per cent stated they overspent by £51-£200. As well as this, 22 per cent overspent by a massive £201-£400 and one in ten (13 per cent) by £401-£600. In response to this question, worryingly, only one third confirmed that they had not over spend during the festive period. January was also found to be the month where employees were the worst off with 55 per cent agreeing to this.
These concerning statistics highlight how much of a challenge Christmas is for employees. With many breaking their budget, we also wanted to find out what employees were trying to do to combat these issues. Our survey results found that a shocking 32 per cent are actively considering taking a second job in order to stay afloat and nearly two in 10 people (19 percent) said they had to borrow money from friends and family. These resolutions are not a positive long-term solution to owing debt. Two jobs can have employees feeling overworked with little free time and borrowing from friends and family is never an appropriate solution to handling financial difficulties.
Arguably the most concerning part that our report concluded is the negative affect to well-being financial problems has on employees. At a time when employee well-being is one of the top priorities for businesses, this is simply a huge concern. Our results found that 34 per cent of workers admitted to suffering from sleepless nights due to worrying about their finances and just over one in ten (13 per cent) were planning to skip work due to travel costs. This figure is something that is likely to have an impact on the happiness and well-being of an employee.
A key theme that appeared in our report is that companies and organisations must take more responsibility when it comes to financial worries of their employees. Employee well-being can have a huge impact on productivity and health of an individual which, in turn, affects business needs for employers.
There is certainly a gap in what employers are doing to help with financial worries. Employers must take more accountability around this and offer alternatives like FCA regulated ethical borrowing which gives employees access to payroll-linked finance to help remove them from the post-Christmas financial rut.