1 in 4 Employees Won’t Last A Month On Their Savings: Why Financial Insecurity Is A Business Risk In 2025

The Impact of Financial Insecurity on Employees

With no real financial cushion, it’s not surprising that employees are worrying about money, and it’s affecting their lives both inside and outside of the workplace.

Money Worries Are A Leading Cause Of Stress

Our survey found that 41% of employees cite money worries as their biggest personal stressor. This was followed by:

• Family issues (40%)
• Thinking about work (36%)
• Mental health (34%).

As an employer, it’s in your best interest to help ease this financial stress, after all, it’s already having a knock-on effect on employee performance and productivity.

Financial Stress Reduces Workplace Performance

80% of employees admit that stress impacts their productivity at work, making financial insecurity a business problem as much as a personal one.

When employees are distracted by financial worries or other sources of stress, they’re less engaged, more likely to make errors, and less effective in their roles.

This shows that stress isn’t confined to an employee’s home life; it follows them into the office, impacting morale, decision-making, and even absenteeism. Without proactive employer support, this stress can lead to burnout, lower job satisfaction, and ultimately, higher turnover rates.

A Comfortable Retirement Feels Out Of Reach For Many Workers

It’s not just short-term financial pressures weighing on employees—long-term concerns about retirement are also growing. Our 2025 Workplace Pensions Survey found that they’re worrying about retirement. Not only do they fear not being able to retire when they want to, but they’re concerned about running out of money once they get to their later years.

Your pension scheme is a crucial part of employees’ long-term financial security, as 76% are relying on their Workplace Pension to fund the majority of their retirement income. But despite this, 68% don’t feel that their Workplace Pension pot will be enough to keep them comfortable.

Salary Sacrifice Pensions Provide A Golden Opportunity

Enhanced pension contributions remain one of the most sought-after benefits among employees—and the good news is, there’s a cost-neutral way for employers to offer more.

By introducing a Salary Sacrifice pension arrangement (also known as Salary Exchange), employees agree to exchange part of their gross salary for increased pension contributions. This reduces both their own and the employer’s National Insurance contributions, creating savings that can be reinvested to enhance employer contributions without increasing overall costs.

It’s a smart, sustainable solution—a win–win that supports employees’ long-term financial wellbeing while helping your business offer a high-value benefit in a cost-effective way.

By empowering employees to make better financial decisions and backing this with the right benefits you can make a real, lasting impact on their financial futures.

Nick Nelms
Senior Consultant, Employee Benefits

Employees Are Seeking Better Pay And Benefits

It’s no surprise that better pay is the top request for reducing stress, with 50% of employees identifying it as a key factor.

However, salary alone isn’t enough. A well-rounded benefits package can play a crucial role in easing financial pressures—offering employees greater peace of mind and a stronger sense of long-term security. (Here’s what employees REALLY want in 2025.)

It’s not just about pay—employees want benefits that offer real financial peace of mind. Supportive perks like Income Protection, Critical Illness Cover, and Death in Service provide security when it’s needed most, while remote or hybrid working helps cut commuting costs.

By thinking strategically, employers can ease financial stress and boost loyalty—not just by raising salaries, but by offering smart, meaningful benefits that make a real difference.

Ways To Improve Employee Financial Wellbeing

Prioritising employee financial stability is a smart move for employers, but it can be daunting to know where to start. Below are some simple, tangible examples of how to make financial wellbeing a priority for your organisation.

Offer Competitive Pay and Benefits

Our survey found that while salary may not be the #1 cause of happiness, it’s the main driver for dissatisfaction if it’s too low. 50% of employees also said that better pay and benefits would help tackle their workplace stress. As an employer, there are several practical steps you can take to address this:

• Benchmarking Your Benefits
  Benchmark your pay against the market to ensure it is competitive
• Implementing Bonuses
  Offering performance-based bonuses to reward and motivate employees
• Offer Benefits To Help With Everyday Costs
  Provide benefits that reduce daily financial strain, such as Season Ticket Loans, Cash Plans, or Employee Discount Schemes.
• Support Long-Term Financial Security
  Include benefits such as Group Income Protection, Group Critical Illness Cover, and Death in Service, which offer peace of mind and financial stability in the face of unexpected life events.

With the cost of living rising, providing meaningful financial support through salary and benefits is a key factor in employee retention and satisfaction.

Enhanced Pension Contributions

One of the simplest yet most effective ways to boost long-term financial wellbeing is by making your Workplace Pension as impactful as possible. In fact, employees saving just 1% more can create a pension pot that’s 25% bigger.

Better still, boosting pension contributions doesn’t have to be costly. In fact, by using Salary Exchange, you can reduce your business’s National Insurance bill and enhance employer contributions at no additional cost. Read more about cutting your NI bill with Salary Exchange.

Improve Communication Around Financial Benefits

Many employees don’t fully understand the financial benefits available to them. To bridge this gap, employers should:

• Provide clear and regular communication about financial wellness initiatives
• Hold informational sessions on topics like pensions, savings, and tax-efficient benefits
• Ensure that HR and management are well-equipped to guide employees on financial resources.

Survey data reveals that only 11% of employees receive regular communication about their benefits, meaning many workers may not be aware of the financial support already available to them. Learn why your employee benefits aren’t making the impact they should.

Richard Noble
Senior Consultant, Employee Benefits

Offer Workplace Financial Education

Financial stress can have a huge knock-on effect on your employees’ wellbeing. It can affect people not only mentally, but physically, too. Providing financial education can give them the information and tools to take control.

As an employer, you can play a key role in helping your employees become financially educated. Doing so not only helps them, but can help you, too. Read our Complete Guide To Financial Education In The Workplace.

Support Work-Life Balance to Reduce Financial Pressure

Another way to help employees financially is by implementing flexible working arrangements that reduce living costs. The data shows that:

• 42% of employees want flexible working hours
• 39% are interested in a reduced working week.

By offering hybrid working, compressed workweeks, or flexible scheduling, employers can help employees reduce commuting and childcare costs, further alleviating financial stress. Read our Complete Guide To Flexible Working.

Fortifying Financial Resilience With The Right Benefits

Helping employees build financial security isn’t just about offering a higher salary – it’s about providing the tools and resources to ensure long-term stability. By addressing financial stress head-on, employers can cultivate a more focused, productive, and satisfied workforce in 2025 and beyond.

But setting up and maintaining your wellbeing benefits requires a decent bit of admin, which quickly becomes time consuming. We do the heavy lifting for you, giving you more time to focus on what matters.

We live and breathe employee benefits, doing this day in-day out for businesses just like yours. Looking at the big picture, we get to know your unique workforce and benchmark your offering against competitors.

Give us a call on 02074425880 or email help@drewberry.co.uk to talk through your options with one of our friendly consultants.

Why Speak to Us?

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We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
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