According to new survey results, the cost of living crisis is still affecting a large part of UK workers, as many of their wages are not enough to cover basic expenses.
A survey of 2,000 UK adult respondents, commissioned Ciphr’s HR and payroll software, revealed that one-quarter (23%) of them had run out of cash before their “payday” (or equivalent), at least once in the past year. This includes more than a quarter of full-time or part-time employees, a third of unemployed people, and two fifths of students.
This means that 12.4 million UK adults over 18 years old are without the funds to cover their daily needs (for however long it may be) until they receive their salaries, benefits, pensions, or other payments. Some survey respondents may have experienced this only once in the past year. However, for others it could be a recurring event.
A third of employees aged under 45 say that they also had difficulty paying bills or buying food in the past year. One in seven (15%) UK workers over 45 years old or one in five (21% of UK adults) also struggled to pay bills and buy food this year.
The cost of living is a major concern for people at the start of their career (and likely on lower salaries).
The survey found that employees under the age of 34 were the most likely of all to have taken out a loan, or even additional loans. They are also the most likely of all to have moved into rented housing with family or friends to save money (25 percent of those aged 18 to 34 have reported doing this, which is well above the average of 10%).
The younger workers were also more likely than older workers to have taken unpaid sick leaves this year.
One in four employees (29%) went to work or worked remotely when they were sick out of fear that their wages would be lost. Over half (55%) are 18-24 year olds, 2/5 (38%) are 25-34 year olds, 1/3 (31%) are 35-44 years olds and 1/5 (18%) is over 45.
Results suggest that those who cannot afford sick leave are likely not entitled to sick pay from their company or contract, but instead rely on the statutory sick payment (SSP). Currently, SSP is only paid out on the fourth day after an illness or injury (assuming that people are earning enough to qualify). This is about to change, fortunately. Today (10 October), the government announced a number of new rights for workers, including the right to receive statutory sick leave from the day they become ill and the elimination of the minimum wage threshold.
Claire Williams, Chief People and Operations Officer at Ciphr says: “As the findings show, navigating high costs of living is still a challenge. Many people are struggling financially, and others feel compelled to continue working despite being sick due to the financial implications of taking time off.
The UK’s SSP has been in need of reform for some years. Lower-earners and part-time workers are particularly affected if they do not work for an organization that provides occupational sick leave. This has led to many employees being forced to work even though they were not well enough. They may have been unable to afford SSP or could not wait to qualify for it.
The new Employment Rights Bill, which eliminates the lower earnings limits and moves the payment date from the fourth to the first day of sickness is a welcome change. The legislative process can take up to a year, so it could be some time before employees begin to see the benefits.
It would be wonderful to know if the SSP is going to increase in rate and if the time period for claiming it will be extended. Reforms must also be flexible enough to support long-term illnesses or disabilities and accommodate a phased return to work.
Williams continues: “Employers have a responsibility and an interest to support their employees’ financial and mental well-being, where possible.” Additional sick pay schemes for employers may not be feasible, but the use of health benefits, flexible work practices, and a sympathetic approach to absence can help to reduce the mental stress often associated with illness and time away from work.
People have been looking for ways to save money in the past year. Some people reduced household expenditure (51%), cut back on insurance coverage or cancelled it (13%), and reduced pension contributions (9%).
A quarter of employees surveyed have tried to increase their income through a more lucrative job (26%), by working longer hours (28%), and/or taking on side jobs (17%). One-seventh (15%) of workers aged over 55 have also reported delaying retirement.
The cost of living survey conducted by Ciphr was in August 2024. Nearly half (62%, or 1,238) are employed. The full results are available at: https://www.ciphr.com/cost-of-living-survey-results
Ciphr, the UK’s leading provider of HR solutions and software for large and medium-sized organisations, is the preferred partner in the UK. Its integrated software, services, and content for HR, payroll and learning, and recruitment, provide HR teams with invaluable insights that help them to develop and grow their organisation. Ciphr, based in Reading is on a quest to amplify the voice and value HR by providing intelligent solutions for people data that will help HR be heard in the boardroom as well as across the organisation.
Visit www.ciphr.com for more information.
The original version of this article Research shows that one in four workers are ‘broke before payday’, according to was first published on Human Resources News.
