One in four workers ‘broke’ before payday, survey finds

The cost of living crisis continues to affect a significant share of the UK workforce, according to new survey data, with many people’s wages – eroded by months of high inflation – just not stretching far enough.

The survey of 2,000 UK adults, commissioned by HR and payroll software provider Ciphr, found that around one in four (23%) has run out of money before their ‘pay day’ (or equivalent) at least once this year. This figure includes over a quarter (28%) of employees in full- or part-time work, a third (36%) of people who are unemployed, and two-fifths (42%) of students.

For context, that’s around 12.4 million UK adults, over the age of 18, left without funds for day-to-day essentials (for however long) until their wages, benefits, pension, or similar, were paid. While this could have happened to some survey respondents just once this year, it’s possible that for many others it’s a regular occurrence.

Nearly a third (30%) of employees under 45 years old say they have also struggled to pay bills or buy food this year. This compares to one in seven (15%) workers aged over 45, or one in five (21%) of all UK adults.

People at the beginning of their careers (and, likely, on comparatively lower salaries) appear to be among the most affected by cost of living challenges this year.

Employees under 34 are the most likely to have taken on a loan or additional loans, as well as the most likely to have moved in with friends or family to save money (25% of 18-34-year-olds have reportedly done these things, well above the survey average of 10%).

Younger workers are also significantly more likely to have worked through illness this year, rather than take unpaid sick leave.

Fear of losing wages saw one in four (29%) employees go to work (or work remotely) when they were unwell. This rises to over half (55%) of 18-24-year-olds, two-fifths (38%) of 25-34-year-olds, a third (31%) of 35-44-year-olds, and a fifth (18%) of the over-45s.

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. That doesn’t currently pay out until the fourth day of illness or injury, though (assuming people earn enough to qualify). Fortunately, that is soon set to change. With the government unveiling a raft of new workers’ rights this month (on 10 October), including access to statutory sick pay from the first day of illness and no minimum earnings threshold.

Claire Williams, chief people and operations officer at Ciphr, says: “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.

“The changes to sick pay outlined in the new Employment Rights Bill – eliminating the lower earnings limit and the waiting time for payment from the fourth day of illness to the first – are (or will be, once this Bill becomes law) a very welcome change. It’s worth noting, that the legislative process could take over a year or more so it may be a while before any employees start to benefit from this.

“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.”

Williams adds: “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 employers, 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.”

Some of the ways that people have looked to save money this year include reducing household spending (51% of the 2,000 people polled), cutting back or cancelling insurance coverage (13%), and reducing pension contributions (9%).

Around a quarter of surveyed employees have sought to boost their income by looking for a higher salaried role (26%), taking on more hours (28%), or taking on a side gig (17%). One in seven (15%) workers over the age of 55 have also reportedly postponed their retirement.

Ciphr’s cost of living survey was conducted in August 2024. Nearly two-thirds (62% or 1,238) of the 2,000 respondents are currently employed.