As the UK’s cost-of-living crisis persists, employees are feeling the strain. New research from LiveCareer shows that 40% of UK workers experience financial stress every week, and 18% experience it daily. When asked to share their primary money concerns, 75% of respondents cited inflation and the cost of living.
These findings, drawn from a survey of 1,000 UK workers in May 2025, align with the economic situation in Europe, where earnings have fallen behind inflation across the past four years.
Lagging wages, spending cutbacks and rising debt
Data published by the House of Commons Library shows a 5.2% rise in average weekly earnings across the UK. However, the majority surveyed in LiveCareer’s research are not seeing this uplift for themselves.
Only 12% of UK workers believe their pay packet has kept up with inflation. And for 39%, wages have not increased at all.
Feeling the pinch, employees have been reducing outgoings to keep afloat. For a significant proportion (64%), this has involved reducing discretionary spending, while 37% have cut back on essentials to get by.
A smaller proportion have turned to more drastic measures: 15% have borrowed money or increased debt, while 14% have taken on additional work to boost their income.
Data from other research bodies suggests financial struggles are particularly prevalent among younger generations. Deloitte’s 2025 Gen Z and Millennial Survey reveals over half of younger employees live paycheck to paycheck and one-third experience work-related stress.
Little hope of a more profitable future
Feeling the financial burn, the workers surveyed by LiveCareer believe there is little hope of a brighter future. The vast majority (89%) are worried about a recession this year and over half (58%) predict a rise in redundancies.
Given that a similar proportion (54%) couldn’t last three months without an income, this bleak outlook will only exacerbate the financial anxiety so many workers feel.
Decades in the making
“The compounding effects of several generation-defining events over the last 20 years have decimated people’s finances in the UK, leaving them vulnerable to the impact this money stress has on their work,” says Gethin Nadin, Chief Innovation Officer at Benifex.
“We can now link an employee’s money worries to more workplace accidents, lower skills adoption, and poorer management. If almost half of the workforce is experiencing financial stress at this kind of regularity, we are at a critical point where failure to improve employee financial wellbeing is preventing our organisations from succeeding,” Nadin warns.
Next steps for HR
To address workers’ money stress and improve financial wellbeing, Jasmine Escalera, career expert at LiveCareer suggests the following steps: “Start with salary, by benchmarking compensation to ensure your company offers competitive, livable wages. If increases aren’t feasible, provide financial support resources like budgeting workshops, mentoring, or coaching,”.
“Transparency is also key. Keeping employees informed about company performance and future plans helps them feel supported and better prepared, even in uncertain times,” she adds.
