With energy bills rising sharply, food costs continuing to soar and inflation hitting 9.4 per cent – its highest rate for 40 years – it is no surprise more people are finding themselves under significant financial stress.
Indeed, the vast majority (63 per cent) of workers have seen their financial situation deteriorate since the start of the year, according to Mintago’s recent survey of 1,024 UK adults in full-time employment. That number will only rise in the months to come.
We cannot underestimate the knock-on effects of financial stress.
In fact, Mintago’s research showed that almost a third (32 per cent) of employees are struggling to complete day-to-day tasks because they were worried about their financial situation.
It underlines the well-established connection between one’s financial wellbeing and mental health.
This is perhaps best demonstrated by the fact 56 per cent of UK adults said their finances are now the greatest cause of stress in their lives, while more than a fifth (23 per cent) admitted to losing sleep as a result of financial anxieties.
The causes of financial stress
That our finances are such a significant source of stress may not surprise many. But knowing what exactly causes financial stress – beyond worries about having enough money – and how to combat these triggers is far more important.
Firstly, a lack of understanding about one’s financial situation can create significant amounts of stress.
Half (51 per cent) of UK adults have not carried out a detailed audit of their finances recently, and the proverbial ‘head in the sand’ approach typically exacerbates feelings of stress, fuelling concerns and uncertainties about how to counter potential issues.
Similarly, as a third (33 per cent) of respondents to Mintago’s aforementioned survey said they do not know where to find help with managing their finances.
This is a common, longstanding issue: many people feel isolated in their struggles and have no one to talk to. As such, financial worries can very easily mature into stress, anxiety and other mental health issues.
As a result of this lack of understanding and support, many people will begin to feel like they have lost control of their finances.
Indeed, with 70 per cent of people worried their financial situation is going to deteriorate further in the future, and 82 per cent admitting that they are financially unprepared if their employment status were to suddenly change, it is clear that action needs to be taken before this issue becomes more acute.
Addressing the causes of financial stress
Tackling financial stress requires a considered, multi-faceted approach.
For example, only two-fifths (41 per cent) of UK adults have spoken to their friends, family or colleagues about their money worries in 2022.
Clearly, money remains a taboo subject in many households, workplaces and social circles. So, more direct engagement is required to ensure that more open conversations occur regarding financial wellbeing.