Following extensive research into the personal finances of British workers in the week leading up to payday, fastPAYE (sister company to Shopworks) recently released the results which show that 46% of respondents suffer with money-related stress during this period.
The findings, as worrying as they are, come as little surprise in light of recently published statistics, such as the 78% of employees in the UK who are living payday to payday and cannot cover unexpected costs when they arise.
We timed the release of our findings to coincide with ‘Blue Monday’ the third Monday of every January – widely regarded to be the most ‘depressing’ day of the year. As workers find their coffers running low towards the end of this notoriously long month, reliance on alternative means of finance has become a necessity for many.
However, it’s not just January that has Britons searching for supplementary finance. We found that one in five reported that they turn to payday loans at some point in the year, whilst 43% delve into overdrafts to cover costs in the final week before monthly wages drop. The most common use of credit in the week before payday is credit cards, with 55% admitting to swiping the interest-accruing plastic before the end of the month.
Our research also looked at what British workers were using credit lines for. The majority (36%) take on debt to pay for groceries.Bills (27%), Leisure activities (19%) and house repairs (15%) were also common prompts for additional borrowing.
At fastPAYE, we have always held the strong belief that workers should not have to indebt themselves to pay for commitments that their wages would cover if only they had access to them. We are not alone in holding this belief. Businesses we have liaised with recognise the need to modernise the way salaries are paid. Indeed, our proposition has been shaped around companies telling us they want new ways of generating strong staff loyalty and morale whilst improving retention.
With a fifth of those we surveyed claiming they would consider moving to another company in the same role if that company gave them access to already earned wages ahead of payday, they are right to be thinking along such lines.
For fastPAYE as a company, the next step is to promote our expertly developed app which returns control to employees so they can manage their personal finances in such a way that reduces their need to acquire unnecessary debt whilst being fast and easy for companies to adopt.