A new report by the Centre for Economics and Business (CEBR) on behalf of Aegon has found that the proportion of both full-time and part-time private sector workers missing work due to financial concerns has risen to 12%, – up from 10% in 2021.
On average, employees lost 4.7 workdays per year, leading to over 3.2 million private sector workers requiring time off in the past year, equating to 16 million workdays lost.
Workers aged 25 to 34 recorded the highest share reporting absenteeism related to financial concerns, at 18.6%. Those in the age groups of 16 to 24 and 35 to 44 followed suit, with shares of 14.7% and 14.4% respectively. In contrast, only 5.8% of individuals aged 45 or older reported taking leave due to financial worries.
Absenteeism accounts for an estimated 16 million workdays but is just one of the primary concerns for employers. Another more prevalent issue is presenteeism, this is where employees attend work but experience significantly reduced productivity due to various personal and health-related factors.
These issues can manifest in diverse forms, dependent on an individual’s personal circumstances, but financial concerns came out as the most common issues over family problems, health issues and job security.
Nearly a quarter of respondents reported a decline in their work productivity over the past two years due to financial worries, marking an increase from 18% in our previous study. Notably, younger age groups are more susceptible to presenteeism due to financial worries, with 28% of respondents aged 16 to 44 experiencing such issues, compared to just 15% of those aged 45+.
Since the publication of the previous report in 2021 consumers have faced the cost-of-living crisis, resulting in a decline in living standards as price growth outstripped growth in earnings. These factors have exacerbated existing financial concerns, subsequently intensifying absenteeism and presenteeism issues among the workforce.
Nick Roy, Director, Client & Partnership Development, at Aegon UK said “Our research uncovers the scale of the impact that financial worries of workers are having on UK businesses. A staggering 16 million workdays lost due in part to soaring numbers of staff experiencing financial concerns should set alarm bells ringing.”
“The combination of absenteeism and presenteeism stemming from financial instability comes in at a massive £10.3 billion annual cost on private-sector businesses annually.”
“Our wellbeing focus includes extensive research with over 10,000 UK residents – is now in its third year. We also deliver the highly successful Pensions Geeks TV quarterly, which are financial education webinars for members. For employers and advisers we host a series of live financial wellbeing webinars each year.”
“Supporting wellbeing and financial education is central to our proposition for members and employees. We’re committed to developing the mindset differentiator – helping people understand the balance between money and mindset which enables for better outcomes.”
“We’re also committed to equipping employers with innovative tools to help their staff feel more in control of their money, including easy to use financial literacy resources, debt management guidance and information on how to reach savings goals.”
“We recently won the award for Financial Wellbeing Champion of the Year 2023, and we’re committed to continuing to improve the support we offer the employers we work with. The report shows that absenteeism and presenteeism are more prevalent in the younger age groups. This perhaps points to a financial resilience of workers already in their ‘Second 50’, which is encouraging. But they too are not immune to financial wellbeing challenges as they reach uncharted territory in their journey towards retirement.”
“A talented and committed workforce is a business’s greatest asset and their wellbeing is essential for long-term success. As the reports points out, fully understanding employees’ financial needs is essential, not only for businesses aiming to attract and retain top talent but also for fostering a meaningful workplace for their people.”