Financial concerns costing Yorkshire and the Humber economy up to £3.73bn, new research shows

Money worries are costing Yorkshire and the Humber’s economy up to £3.73bn a year in lost productivity and recruitment expenses, according to new research.

This figure forms part of a £51bn a year cost to the UK economy that is highlighted in a joint report from Yorkshire Building Society and Salary Finance.

Financial concerns make employees significantly less productive, unable to finish daily work tasks and more likely to change jobs, the new analysis shows.

Yorkshire Building Society estimates this impact on productivity costs employers in Yorkshire and the Humber between £2.8bn and £3.73bn per year.

40% of UK employees worry about their finances and the UK’s saving to income ratio is at its lowest level since 1963.

Yorkshire Building Society and Salary Finance want the Government and employers to address this by placing financial well-being on a par with physical and mental well-being. The two companies said this can be done by providing support and schemes where employees can save directly from their salaries.

Mike Regnier, chief executive of Yorkshire Building Society, said: “The economic impact of financial insecurity cannot be overstated. It’s clear that we are a nation of spenders, not savers as highlighted in our workplace savings report.

“This can cause people issues with paying an unexpected bill or coping with a sudden loss of income due to sickness or unemployment. But on top of the personal cost, this is an issue that affects employers too. Employees with money worries could cost Yorkshire and the Humber employers up to an estimated £3.73bn a year.

“That’s why over the next five years, we want to help an additional 1.8 million workers who aren’t saving to start putting away money. As someone leading a business which is responsible for looking after £29bn of people’s money, you might expect me to say that.

“But I think it’s in everyone’s interests that more people save because the low proportion of saving is having major consequences at an individual, economic and social level. This will benefit everyone because increasing the nation’s financial resilience has clear benefits for the economy and for employers.”

The report, which has been endorsed by debt solutions charity StepChange, shows that saving and financial education are vital to financial resilience and calculates that if just 5% more employees a year start saving, by 2024 an additional 1.8 million would be savers.

Richard Lane, director of external affairs at StepChange Debt Charity, added: “Helping households to build better financial resilience needs to become a firmly embedded goal not just for policymakers but for all of us.

“When people turn to StepChange Debt Charity for debt advice, 98% of them have no savings whatsoever. We’ve long called for realistic mechanisms to enable more households to save – and in previous research have estimated that if every household in Britain had £1,000 in accessible savings, this would reduce the number of people in problem debt by half a million.”