Middle earners ‘struggling to keep up with essential costs’

Nearly two-thirds of middle-income earners are struggling to make ends meet, new moneyappi research has found.

According to the study, 62% of people earning between £25,000 and £45,000 a year are finding it hard to keep up with essential costs.

Energy prices were found to be one big concern, with 67% saying rising bills are causing them stress.

Meanwhile, 59% said their weekly food shop has become unaffordable.

Housing costs are another key issue, as 58% say their rent or mortgage now takes up more than half their monthly income.

Financial pressures are also putting many middle earners at risk of falling into a cycle of debt.

Figures showed that almost half (43%) have used credit to cover everyday costs like food, fuel and energy.

But nearly four in ten (38%) were found to have missed or delayed a debt repayment in the last six months.

The problem is being compounded by the fact that little help is available, as middle earners are typically above the threshold for most government benefits and cost-of-living payments.

At the same time, many are plagued by the sense that they're "doing everything right, but still falling behind” and watching their disposable income shrink.

In fact, one in three said they feel worse off now than they did during the height of the pandemic.

And almost three-quarters say their wages haven't kept pace with inflation.

“Middle earners are falling through the cracks of an antiquated system that hasn't adapted to current systemic issues," said Ray Law, co-founder of moneyappi. 

"They earn too much to qualify for help, but not enough to absorb the rising costs of living. 

“That’s putting them under serious financial stress.”

Stress and anxiety can’t simply be left at home, so unsurprisingly, money worries are having an impact in the workplace.

Figures showed that:

• one in four middle earners have taken time off because of money worries
• more than four in 10 say money worries have affected their workplace performance
• over a third have considered changing jobs or asking for more flexibility to help cut costs
• 44% of middle-income parents say childcare costs outweigh the benefits of working

As a result, many businesses are counting the cost in the form of increased absenteeism, lower productivity and higher turnover.

Employers have now been urged to do more to support financially stressed workers, such as:

• improving access to financial wellbeing tools
• offering more flexible working arrangements
• supporting financially stressed workers through better communication

"Financial stress isn’t just a personal problem; it’s a workplace issue," Law added.
 
“By supporting the financial wellbeing of middle earners, employers can boost morale, reduce absenteeism and retain talent."