Months of high inflation continues to hit people in the pocket as almost a quarter of the UK population have run out of money before ‘pay day’ at least once this year, a survey has found.
The survey of 2,000 UK adults found that 23 percent of people run out of money before they are due to receive their ‘pay’, which can refer to wages, benefits, pension payments or another financial equivalent.
Within this financially stretched group, 28 percent are in full- or part-time work, 36 percent are unemployed, and 42 percent are students.
Young worst affected
Software provider Ciphr, which commissioned the survey, calculated that 23 percent equates to around 12.4 million UK adults being left without enough money to buy essentials until their next ‘pay day’.
Findings show that this has happened to nearly a quarter of survey respondents at least once this year, but it’s possible that for many others it’s a regular occurrence, the provider said.
Since January 2024, two fifths (40 percent) of 18 to 34 year olds, more than a third (34 percent) of people aged 35 to 44, and nearly a quarter (23 percent) of people aged 44 to 54, said they have run out of money before their ‘pay day’ at least once this year. The percentage was much lower for over 55s with just 10 percent saying they ran out of money.
Delayed retirement
Data for those in work showed that almost a third (30 percent) of employees under 45 years old have struggled to pay for essentials this year, compared to 15 percent of over 45s.
And 28 percent of employees aged over 65 said they had delayed retirement due to the cost of living crisis.
Employees under 34, likely to be at an earlier point in their career and therefore on comparatively lower salaries, appear to be most affected by the cost of living in 2024.
Working when sick
Survey data showed that workers in the under 34 age group are the most likely to have taken out a loan or additional loans. This age group was also the most likely to have moved in with friends or family to save money. A quarter of 18 to 34 year olds have reportedly done these things, which is above the survey average of 10 percent.
Younger workers are also significantly more likely to have worked when ill, the survey found. Overall, 29 percent of employees work when sick rather than lose wages. More than half (55 percent) of 18 to 24 year olds reported doing this, compared with 38 percent of people aged 25 to 34 and under a third (31 percent) of 35 to 44 year olds. Among employees over 45 the figure was 18 percent.
Ciphr said that the results suggest that many of the respondents who can’t afford to take sick leave probably don’t have access to company or contractual sick pay but rely on statutory sick pay (SSP) instead.
SSP changes
Under current rules, the first three days of SPP are unpaid and if employee earnings are below a certain limit then workers are not eligible. This might change when the Employment Rights Bill finally becomes law as it pledges that SSP will be payable from the first day of illness and that it will remove the minimum earnings threshold.
However, the bill has only just been introduced to parliament (10 October, 2024), so changes to employment law are not expected in the next year. It is worth noting that the bill is also subject to consultation and intense debate, so not all the changes in the bill will necessarily become law.
Financial struggles
Claire Williams, chief people and operations officer at Ciphr, said: “As these findings show, navigating the high cost of living continues to be incredibly challenging, with many people still struggling financially and many others feeling compelled to work through illness due to the financial impact of taking time off.
“The UK’s SSP system has needed reform for some time, with lower earners and part-time earners particularly disadvantaged if they don’t work for an organisation that offers occupational sick leave. Over the years, this has inadvertently created a situation where many employees have been forced to work when they may not have been well enough to do so because they weren’t eligible for SSP, or they couldn’t afford to live on SSP, or wait the qualifying time to get SSP.”
She said that the changes to sick pay outlined in the new bill will, once it becomes law, be a very welcome change.
“It will also be great to see if there’s any planned increase to the rate of SSP and an extension to the length of time people can claim it. Reforms also need to ensure that it’s flexible enough to accommodate phased returns to work and supports long-term illness or disability,” she added.
“Employers, however, do have a responsibility, and vested interest, to support employees’ mental wellbeing and financial wellbeing where possible. While additional company sick pay schemes may not be financially viable for lots of organisations, the use of health-orientated benefits, flexible working practices, and an empathetic approach to absence, can go a long way to alleviate the mental stress that can often accompany the physical stress that illness and time off work can create.”
