Four in 10 people who could not cover a sudden £300 bill earn above the national median salary, according to a report by lender Plend and investment manager Triple Point.
The same research found 36 per cent of employees earning between £40,000 and £80,000 said their finances had worsened over the past year. Among those earning under £40,000 the figure was 49 per cent. Among those earning over £80,000 it was 22 per cent.
The gap between the first two numbers is narrower than most financial wellbeing strategies assume.
Why does this matter for HR?
Financial wellbeing provision has tended to be built on a hardship model. Support gets designed for the lowest paid, described in the language of crisis, and promoted through channels aimed at people already known to be struggling.
If these research findings hold across the wider workforce, that design leaves out a large share of the people affected.
Employees in the £40,000 to £80,000 band often include team leaders, specialists and long-service staff, which is the population most employers are working hardest to retain.
Why doesn't a higher salary solve it?
Fixed costs tend to rise with earnings and then stay put.
A mortgage taken out against a particular salary, childcare arranged around a particular working pattern, a car on finance, higher insurance premiums.
These commitments were made when the income felt comfortable and they don’t change when prices move.
The result is that pay progression is often taken up entirely by cost of living before it reaches disposable income.
An employee on £55,000 with £2,400 of unavoidable monthly outgoings can have less month-end flexibility than a colleague earning considerably less.
Pay reviews are a poor instrument for this.
The money arrives and goes straight out again.
Why won't these employees use the support on offer?
Take-up is the practical problem.
Someone earning a professional salary who cannot cover their direct debits rarely thinks they need a benefit framed around hardship.
The framing carries an implication about the person using it, and that implication is one most people on a decent wage will avoid.
There is also the question of who else finds out.
Employees are alert to whether using a financial wellbeing benefit puts something on record with their employer, and whether a manager might see it.
Where that is unclear, people tend to assume the worst and stay away.
What can employers change?
Reviewing who the provision was designed for is a reasonable starting point.
Most financial wellbeing strategies were scoped several years ago against a different set of assumptions about who needs help.
Beyond that, there are a few areas worth examining:
Language used in benefits communications, and whether it describes financial pressure in terms an employee on £60,000 would recognise as applying to them.
Whether access is genuinely anonymous, and whether employees have been told so in plain terms rather than in a policy document.
Whether take-up is measured by salary band. Aggregate usage figures conceal exactly the pattern this research points to.
Whether the offer covers the pressures middle earners actually face, including fixed costs, credit commitments and the point at which borrowing starts covering essentials.
Whether free debt advice is signposted clearly, and whether employees understand it is open to anyone regardless of income.
Written by Caroline Chell
Head of Communications
