New research* has found that many UK workers are still struggling with the ongoing effects of the cost of living crisis, and this has led to rising concerns and drastic steps to try and save money.

The survey of full and part time workers across the UK* revealed two thirds (66%) say they are worried about the cost of living crisis. This has increased over the last 12 months, with six in ten (61%) saying they are now more worried about it compared to a year ago, with only 11% saying they are less worried. Concerningly, almost half (48%) say it has impacted their ability to do their job. This shows, despite a recent fall in the rate of inflation, the crisis is casting a long shadow over employees with the majority still negatively affected.

Falling disposable income

The cost of living crisis has hugely impacted UK adults, with many households experiencing a fall in living standards since 2021. Just over half still say their living costs has increased compared to a year ago and financial pressures look set to continue for some time. Real household disposable income in the UK fell by 2.2% in the 2022/23 financial year, and will fall by 0.8% in 2023/24, and by 0.5%in 2024/25[1].

The survey findings reflect this, with four in ten workers saying they worry about money every day. Money worries are rife across the workforce with 74% stating they worry about money at least once a week. The main financial concerns are rising utility prices (58%), having to putting plans on hold (55%) and increasing food prices (50%). To combat these ongoing financial pressures, employees are taking the following steps: purchasing cheaper food (82%), using savings or credit cards (70%) and cancelling holidays (61%). Alarmingly, nearly 4 in 10 (37%) say they have skipped meals.

Breakdown by salary

Looking at employee concerns in greater detail, it is those on the lowest salaries who are worried most. Those earning under £25,000 a year and those earning £25,000 -£40,000 a year are the most worried (69% and 68% respectively). This compares to higher earners on £40,000 – £60,000 and a year and £60,000 plus being less worried (55% and 54%).  Interestingly it is those employees earning more than £60,000 a year who are most worried about how the ongoing crisis will impact their ability to do their job(57%). This compares to employees earning under £25,000 a year (54%), £25,000 – £40,000 (48%) and £40,000 – £60,000 (44%) saying this is the case.

Lower salaried employees are the most worried about rising food prices. More than five in ten (53%) employees who earn under £25,000 a year said this was the case, closely followed by 50% of those earning £25,000 – £40,000 a year. This compares to those who earn £40,000 – £60,000 a year, who are the least concerned, with just 36% saying this was the case.

Rising utility bills are also the biggest cause for concern for those on lower incomes. More than six in ten (61%) of those earning under £25,000 a year are the most worried about this, closely followed by those earning £25,000 – £40,000 a year (60%) – this compares to 44% of those who earn £40,000 – £60,000 who were the least concerned.

Paul Shires, Commercial Director at Health Shield Friendly Society, commented: “UK employees have been hit hard over the last few years by the twin blows of rising costs and falling disposable income. Whilst almost everyone is looking to save money and budget smarter, it is really shocking that so many say they are skipping meals to try and combat the effects of the cost of living crisis. This level of constant worry about money and finances will cause additional physical and mental stress and is very likely to damage employees’ health and wellbeing.

Employers should also be mindful that, as our insight shows, employees in the lower salary brackets, will be worrying much more about practical day to day factors at the moment such as rising food prices and the cost of utilities.  For a significant number, these worries will impair their ability to work effectively. More than ever, it is up to responsible employers to step in, providing employees with access to a wide range of support to help alleviate the pressure and empower employees to address these issues. Creating an environment where employees feel comfortable to reach out for support when they need it is vital. The essential assistance offered through Health Cash Plans can provide the perfect solution, creating a solid base from which to build an effective health and wellbeing strategy.”

*Health Shield Friendly Society