The case for cost-of-living support in 2025

In a well-meaning response, employers offered one-off solutions like loans or payments to provide some relief. While the intention behind these initiatives was genuine, they were more of a quick fix than a lasting solution—kind of like putting a plaster on a wound that really needs stitches.

Now that things are starting to ease, and with the Real Living Wage increase coming in 2025, some employers might be wondering if cost-of-living support is still necessary. Plus, tight budgets (made even tighter by NI spikes) could make employers feel like offering extra financial support just isn’t doable.

A silent struggle 

Employees aren't exactly being open about their money worries, so it’s easy for employers to assume the worst is over. 3 in 4 haven't spoken to their employer about financial stress, even though over 60% are worrying about money at least once a week.

With nearly half of employees expecting a tough year ahead, it's clear that the pressure hasn't gone away. Therefore, employers who make financial wellbeing part of their people strategy won't just be supporting their teams—they’ll also benefit from a happier, more engaged workforce.  

Financial wellbeing: what it really means

Financial wellbeing means feeling secure and in control of your money, ready to handle surprises and confident about planning for the future. It's about building resilience and reducing stress so you can focus on the important stuff. When you've got that stability, it's easier to stay productive and perform your best - especially when it comes to work.

But for many, the lingering effects of the cost-of-living crisis are making financial wellbeing harder to achieve. In 2024, 1 in 4 workers ran out of money before payday, forcing them to rely on credit cards and loans to get by.

Essentials like housing, food and transport have become less affordable, and savings have taken a big hit for those with salaries that can’t keep up. Startlingly, 1 in 6 UK adults now have no savings at all.

The impact on your team  

The cost of poor financial wellbeing goes far beyond the wallet. Money and finances are the second biggest cause of stress, and that stress often creeps into the workplace. In fact, nearly 8 in 10 people bring their money worries to work, which can disrupt focus, reduce engagement and harm productivity.

Over time, financial stress can develop into serious mental health struggles. When employees are weighed down by financial worries, it's hard for them—and the business they work for—to thrive.

If employers don't step up for their people’s financial wellbeing, they could face higher turnover as more employees jump ship for companies offering better pay and support.

Is the cost-of-living crisis actually over?

• UK long-term borrowing costs have reached their highest since 1998
• Household bills are expected to rise in 2025 
• Retail body warns that food prices aren’t 'going anywhere but up' in 2025
• Wage stagnation will continue into 2025 and beyond

Building a business case for cost-of-living support 

Providing cost-of-living support isn't just a nice gesture—it’s a smart investment. In 2023, financial stress cost UK employers £10.3 billion in lost productivity. With inflation now starting to ease, it's time to shift focus to making everyday costs more manageable, helping staff plan for the future and supporting their financial sustainability. This shows that you’re a responsible employer who truly cares, which could also help to boost loyalty and morale.

The payoff for employers:

• More productive, focused teams
• Less absenteeism and presenteeism
• Attract the best talent with support people really need
• Stand out as a top employer in a tight market
• Foster a positive culture by reducing stress
• Make long-term savings through better productivity, engagement and lower turnover

Financial support without the sting

Supporting your team's financial wellbeing in 2025 doesn't have to be costly. A tailored employee benefits package can help them tackle their unique financial challenges and build long-term stability.

Boosting financial education through workshops and resources empowers your people to take control of their money and adopt healthy spending habits. And flexible working? It can be game-changing for financial wellbeing—saving your people money on childcare, travel, pet care and more.

Moving forward with financial wellbeing

The cost-of-living crisis might be improving, but it's still a challenge for many employees. Just keep in mind that supporting financial wellbeing at work is good for your people and your business. Because when employees feel supported, they're more focused, engaged and ready to go the extra mile.  

So, why not take the next step today? Reach out to learn how an employee benefits package could help your team manage their financial wellbeing now and, in the future - no matter what’s around the corner. If you want to learn how an employee benefits package could help your team, get in contact with us today.