Is your workforce suffering a Christmas debt hangover?
A study by the Halifax recently showed that the average cost of Christmas was £506 - an 8% rise from a year earlier. While some employees will have been putting money aside to pay for the celebrations, the research revealed that a third of people will have to borrow to buy presents, festive food and drink, and keep the family entertained over the holidays.
A study by the Money Advice Service in 2014 found that people are making some fairly poor decisions when it comes to borrowing, some 46% said they would borrow on a store card, overdraft, or credit card. There are some cards offering long interest-free periods to enable shoppers to spread the cost of Christmas without paying interest charges. Unfortunately, many people are just using their existing card, compounding their borrowing issues by adding high interest charges to their debts. Even more worryingly, 1.4 million UK adults will turn to payday loan companies to help pay for Christmas - a notoriously expensive way to borrow.
It's hardly surprising, therefore, that according to the Money Advice Trust, the number of calls to its National Debtline jumped by 61% after Christmas, as people struggled to manage their extra borrowing. These money worries are no overnight sensation either: they can last for months. The Halifax study found that a third of people who borrow for Christmas still have debts outstanding in February, and expect their debt hangover to last until at least April.
A recent study by the Social Market Foundation and Neyber found that we are reaching a crisis point. One in 12 workers have financial worries, and nearly a quarter say they are "just about managing". The number of people in the UK under increased financial pressure has doubled since 2014, and 40% have suffered stress as a result of money worries in the last year alone.
Money-related stress doesn't just reside in a small corner of people's minds either. It can grow to dominate their lives, causing them to lose sleep, and suffer anxiety. They bring anxiety to work with them too, which can damage their mental health and severely hamper their performance in the workplace.
The consequences of Christmas debts therefore run far deeper than many people appreciate, the question for employers is whether they ought to be doing something to help and if so, what?
So what can employers do?
Download our latest report The importance of addressing financial worries in the workplace to find out what employers can do to support employees