New research from Intuit QuickBooks* – the financial management software provider – reveals that UK workers are adopting a far more cautious approach to spending as lockdown lifts, as their finances bear the battle scars of the pandemic. Yet there is still low uptake on taking steps to maintain financial health, such as checking payslips.
60% of UK employees surveyed will be keeping their spending to a minimum going forward, despite lockdown lifting. Of these, 19% have had no choice but to keep their spending low to due to the impact of COVID-19 on their finances, while 41% will do so out of choice.
Younger employees are more likely to be forced to keep spending low, with 30% of workers aged 16-24 in agreement – the highest of all age groups. But overall, older employees intend to take the most cautious approach, with 53% of over 55s choosing to keep spending low, compared with just 26% of those aged 16-24.
COVID-19 has created higher financial awareness – yet fewer workers are checking their payslips
The research shows that more than three in five employees (61%) surveyed agree*** they are more aware of their finances now than before the pandemic, but worryingly a third (33%) of UK employees are still not checking their payslips every month to mitigate against third party errors (such as being issued the wrong tax code). What’s more, this is becoming a growing problem, with the proportion of those neglecting these checks increasing from 23% in September 2020.**
This neglect of simple financial health practices is also despite 58% of employees saying they are now more concerned about their finances than they were before the pandemic.
There is an increased tendency to a ‘head in the sand’ approach among the younger working generation, with only 27% of 16-24’s checking their payslips on a monthly basis compared to 60% of over 55s.
Concerningly, nearly half (48%) of employees say they have inadvertently paid too much tax as a result of an error (such as being on the wrong tax code) – an increase from 31% agreeing with this statement in 2020.
The impact of COVID-19 on household finances means payslip errors are a risk many cannot afford to take. Nearly half (47%) of respondents say that their household finances have been impacted negatively by the pandemic. Of these, 46% have seen a drop in income due to being placed on furlough, while 21% experienced this due to loss of employment. A third (34%) say they have had to dip into their savings to cover the costs of living expenses.
Pauline Green, Head of Product Compliance at Intuit QuickBooks, comments:
“Workers are much more aware of their finances since the pandemic, as many experienced difficulties like taking a hit to their income. We’re also seeing a far more restrained approach to spending than many might have expected coming out of lockdown.
“Given this, it is surprising that employees are still not checking their payslips – not only is this key to having a true picture of your finances, it’s also a quick and easy way to ensure you aren’t paying more tax than you owe.
“It is important that we learn from the lessons of the pandemic. Keeping a close eye on finances is good for your financial health, and checking payslips every month can really help achieve peace of mind.”
Employees open to workplace saving
The research also found that if it was an available option, almost half (48%) of employees would consider participating in a payroll deduction scheme.
Says Pauline: “With nearly a quarter of workers in our study saying they struggled to save during the pandemic, it is time for more companies to consider payroll deduction schemes as a great way of helping staff to save more and improve their overall financial health.”
For more information and details of how QuickBooks can help you switch to a compliant, simple and easy payroll solution please visit http://www.quickbooks.co.uk/payroll .