Summary: When it comes to financial wellbeing, nearly half of UK adults now face money difficulties, and the impact on workplace performance is severe. Financial stress drives 19% of sick leave, reduces productivity by 23%, and makes employees twice as likely to leave. Yet there’s hope: employers typically see £3 return for every £1 invested in financial wellness. Gethin Nadin proposes one clear action for 2026: help every employee build £250 in savings. This simple buffer reduces stress by up to 65% and significantly improves mental health, making it both a moral imperative and smart business strategy.

For the past five years, I’ve written an annual article on financial wellbeing in the workplace for HRZone, tracking annual progress, sharing the latest research, and advising employers of the year ahead. This year, I’m afraid the message is starker than it’s ever been. Even through the pandemic and the cost-of-living crisis, the current concerning state of the nation’s finances should jolt every employer into robust action in 2026.

Nearly half of UK adults are financially vulnerable

As we begin a new year, we do so with almost half of UK adults living in financially vulnerable circumstances – up nearly 20% since 2022. Almost 43% of workers now have no money left each month after paying for essentials. Most alarming, however, is the 59% rise in people with “reasonable incomes” who are still juggling high levels of debt.

Revolut reported last year that 80% of employees earning over £100,000 a year worry about their financial wellbeing regularly.The squeeze is being felt by almost every employee, with Government figures showing that earning £100,000 in 2026 is worth the equivalent of around £81,000 in 2021.

One in three employees admits they are just one payday away from serious financial trouble. The Building Societies Association (BSA) now, quite rightly, calls this a “financial wellbeing crisis.” 

Financial wellbeing and rising poor health

Financial wellbeing and overall wellbeing are deeply connected. Six in ten UK employees say financial stress is harming their health, which in turn is driving worse outcomes at work. 

Beyond the moral imperative, employers should be worried about the impact on business. Almost every employer is concerned about sickness levels – and with good reason. Long-term sickness costs UK employers £20,700 per person per year; short-term sickness costs £13,800. The Institute of Employment Studies estimates up to 16% of a salary bill may be spent on absence, and only half of that is direct salary costs. For context, staff costs as a percentage of turnover averages at 25-35%. That’s a lot of lost revenue. 

Money stress is a major contributor to this lost revenue: 19% of employees say they took time off in 2025 due to illness caused by financial worries. And it’s not just absence – financial stress drives distraction, reducing productivity by 23%, and makes employees twice as likely to job hunt. In fact, as you read this article, 35% of employees are thinking about switching jobs solely because of their financial situation. 

A crisis with a glimmer of hope

Nearly all employees agree: financial stress impacts work. So let’s call this what it is – a crisis. But while financial wellbeing is a shared responsibility between individuals, society, and government, employers can make a real difference here, for both themselves and their people.

With over half of workers spending three hours per week – 156 hours per year – dealing with personal financial issues, workplace financial wellness programmes have the potential to reclaim this time. Employers typically see a £3 return for every £1 spent on financial wellness, thanks to reduced absenteeism and higher productivity. Investing in the financial resilience of your employees isn’t just a moral imperative, it’s a smart business decision. 

But the challenge I hear most often is securing investment for financial wellbeing initiatives. Of the 80% of reward and benefits directors who made significant changes last year, more than a third saw their proposals rejected due to insufficient ROI. We therefore need to be much smarter in how we seek investment and make the results of doing so far more appealing to the board.

With hiring freezes and economic uncertainty ahead, 2026 will be about workforce optimisation – not headcount growth. That’s where we can position financial wellbeing as a strategic lever.

A human value proposition

Financial wellbeing should be a CEO issue. Productivity ranks as a top priority for CEOs, directly linked to profitability, revenue growth, and retention. This is why AI dominates boardroom conversations, as it produces productivity gains for CEOs. But emerging evidence reveals that for corporate AI adoption to thrive, a wellbeing-focused culture is vital. 

In 2024, Microsoft found that high-performing organisations are 90% more likely to succeed with AI, and the vast majority of these organisations (96%) have strong people-centric cultures.

To reach the productivity gains most CEOs desire, and to deliver results from AI investments, we must find more ways to support our people’s finances. 

If you do one thing: Put more money in people’s pockets

Fixing financial wellbeing is complex, but here’s one actionable step: put £250 more in every employee’s pocket this year. Among workers, a top money concern in 2025 was a lack of any meaningful savings for emergencies. Ensuring even a small savings buffer makes a difference to people’s chances of developing better financial resilience. 

Households with a £250 savings buffer are far less likely to miss bills – an event strongly linked to emotional distress. Research shows that having any reserve reduces stress by up to 65%, while also improving decision-making. Even saving £100 in one month significantly boosts confidence and perceived control, especially for low-income individuals. Better than that, if you can get their savings account to £1,000 in the space of a year, you’ll make employees almost three times more likely to have better overall mental health. 

The north star: £250 and beyond

This crisis is real, but it’s not insurmountable. Employers have the power to change the trajectory of financial wellbeing – and it starts with a simple, tangible goal: help every employee this year to build at least £250 more than they currently have in savings.

Whether you achieve this through employee discount schemes, wage advance programmes, payroll savings, or access to financial advice and education, the principle is the same: put more money into people’s pockets. Every pound matters. Every buffer counts.