As inflation and prices continue to rise, the Bank of England is predicting the biggest financial squeeze in over 30 years.
According to 2026 research, 37% of people in the UK report struggling to cover basic expenses such as rent, mortgage and utilities. With the continuing cost of living crisis impacting workers, employers must prepare for the real consequences of financial stress on mental health in the workplace.
While it can be tricky to navigate conversations around money in the workplace, people will be looking to their employer to take action to support them through this period. Whether it’s an inflation-linked pay rise, additional workplace benefits or signposting to external support, there will be a growing expectation for employers to take a proactive approach to money and mental health.
How can employers help with financial wellbeing?
Employers may be hesitant to broach the topic of personal finance with their people. Our relationship with money can be complex, and the conversation is often difficult, especially in the workplace.
But money worries are a wellbeing concern as much as a financial one, and employers must consider the stress and mental health impact of a workforce feeling the squeeze.
With over three-quarters of the population (88%) worried about the increased cost of living, managers should be prepared to discuss financial wellbeing concerns with their team.
While some employees may approach this conversation with expectations around pay and benefits, many more will value the opportunity to discuss their problems and feel heard, and managers should feel confident to ask what they can do to help. This might be as simple as signposting information and resources for those who need further guidance.
HR teams should consider what aspects of their existing benefits package could be helpful to those under financial stress. Employees may not fully understand how to claim their workplace benefits, so it’s important to communicate what’s on offer on a regular basis. You could hold a webinar or workshop to remind employees about any salary sacrifice schemes, pension options, retail discount schemes or training opportunities which may help them to manage their personal finances.
Impact of financial stress in employees
As the cost of living crisis continues to impact individuals and families across the UK, organisations should consider how financial stress can impact employees. Impact of financial stress on employees includes:
- Productivity: 39% of employees in 2026 have reported that financial stress impacts their productivity at work. Offering wellbeing support and access to professional support can help employees have open conversations about how they feel impacted by financial pressures and stress. This not only shows a huge impact on employees’ mental health but also a consistent business impact from employees’ financial stress.
- Absenteeism: The impact of financial stress on employees can often be seen beyond their working hours. 83% of UK employees have reported taking time off work sick due to stress or anxiety linked to financial concerns. In comparison, 37% of surveyed employees report lower stress and better mental health when feeling more in control of their finances.
- Employee turnover: The impact of financial stress can cause significant financial and mental health concerns that impact your employees outside of work. A 2025 survey revealed that 44% of employees named salary dissatisfaction as the key reason they were considering new opportunities. This shows that employees who feel financially unsupported or stressed are at higher risk of leaving their positions to seek new opportunities, increasing employee turnover and training and recruitment costs.
Signposting your people to further advice
As an employer, it’s often not possible to offer financial advice, but you can share a list of useful resources via email or your intranet to ensure employees have access to professional support. Try to include a variety of different services such as:
- Mind.org.uk: Information from popular mental health charity Mind, exploring the link between money and mental health.
- Citizens Advice: Tailored help and advice with understanding debt and money.
- NHS Coping with financial worries: Practical advice to help people better manage financial stress and its impact on their health.
- Stepchange: Expert debt advice and fee-free debt management for those who are struggling to repay.
Read more about workplace financial stress and mental health.
Here at Westfield Health, we want to support employers and employees to prioritise wellbeing and mental health during times of financial stress and difficulty. This is why we have created a helpful ‘Looking after your wellbeing during the cost of living crisis‘ guide to be shared with your whole team. The guide aims to offer help and advice for employers to support your teams through this difficult time.
