Worrying about money could harm your chances of promotion and receiving a higher salary

We know that being broke is bad for our physical health, our relationships and our mental health. But new research has unearthed wide-ranging effects of financial difficulty on our working lives, including huge risks to career development and salary increases.

The study, carried out by Hastee Pay and shared with The Independent, surveyed 1,000 workers and revealed that 25 per cent have suffered from a lack of concentration at work because they have been worrying about their personal finances. And 19 per cent say their workplace performance suffered as a result of their worries.

More than a fifth (21 per cent) admit they have managed debt repayments during working hours.

Particularly worryingly, almost a third of workers say they have missed work due to not having enough available money to pay for their travel costs.

Missing work because you don’t have enough cash left to get there could be an even bigger risk after Christmas. That’s not just because January is a tough month for many due to Christmas spending and an early December payday. But also, rail fares rise by 3.1 per cent on 2 January, fractionally less than the 3.2 per cent used by the Retail Price Index to specify how much fares can rise by.

“I spent six months trying to dodge the train fare on the commute to my first job because I couldn’t afford to pay for it,” admits “Sophie”, who asked us not to reveal her real name. “It isn’t something I’m proud of. Every time I got off the train at the other end and walked towards the ticket collectors parting the crowds on the platform I felt sick.

“I was earning £12,000 a year before tax in London but living miles away on a friend’s sofa because the rent was affordable. Money was so tight I was trying to restrict my meals to keep on top of my cash. If I’d have been caught fare-dodging I would never have been able to afford the fine. Just thinking about it now makes my heart beat go up.

“I dreaded going to work every day, but not because I hated it. I loved my job, but I spent a lot of it worrying about whether I could get home or not. Money fundamentally affected everything I did, from having tidy, clean clothes to wear at work to building vital relationships with colleagues.”

Surprisingly though, this kind of financial stress affects both high and low earners; the research showed 21 per cent of people in average level roles feel their work has been affected, while 30 per cent of people in higher paid roles felt the same.

So could money worries genuinely be holding workers back?

Bad for business

It’s not just workers who risk missing out on achieving their potential because of financial worries, it’s the businesses that employ them.

Workers who are worried about money lose up to two hours of productivity a day, according to analysis released earlier this year by Aegon. It found that workers worry more about money than family and health.

Over four million days are taken off every year because of financial worries, costing businesses £1.6bn each year.

Ronnie Taylor, workplace savings director at Aegon, said: “Poor financial wellbeing is a huge issue impacting both employers and employees. We’ve uncovered significant evidence that it is damaging productivity in workplaces up and down the country.

“There is a need for businesses to understand more about this issue and urgently address its causes. This has been a long-term problem for employers, but our research shows that those who can focus on and address this issue are likely to reap significant benefits to their bottom line.”

But it’s an issue that appears to be growing, for businesses and their employees alike. The latest Close Brothers business barometer found that 25 per cent of businesses say they have seen an increase in employee health issues resulting from money worries.

The financial ball

If money worries prevent people from achieving their full potential then there’s a risk they will be held back from earning more. So what is the answer?

While there’s no magic way to rustle up more money, there are ways to tackle the worries and stresses caused by chaotic finances.

Liz Alley, divisional director of financial planning at Brewin Dolphin, says it is essential people get a grip on their finances to reduce the uncertainty they feel.

“In my line of work, I meet people who suddenly realise that they took their eye off the financial ball,” she comments. “When this happens, the impact of an unexpected situation can be much more intense, because there are money issues on top of a very stressful situation. It might be something minor like a boiler breakdown, or major like a relationship breakdown or an unexpected illness.

“Being aware of your financial position doesn’t magically mean you’ll have more money but financial foresight can ease painful processes. For example, know what funds you have access to, keeping relevant paperwork in a safe and accessible place.”

She urges workers to draw up a budget so they know exactly what is going in and out. That’s an essential step for reducing financial stress because it provides far greater control. If there’s still simply not enough coming in to balance the books, it could be time to seek additional help rather than suffering sleepless nights and workplace distraction.

“Making a simple budget can identify sources of financial stress that could have an impact on your mental or financial wellbeing. Worrying about money can be a cause of anxiety and if not addressed quickly, it can spiral out of control.

“When a financial situation feels out of control it is important to seek help. Talking about money problems with someone impartial can sometimes relieve money stress. Many organisations offer free guidance and support in the UK, including the Money Advice Service and Citizens Advice.”

If financial stress is causing someone to lose hours of workplace productivity each day then that means it’s affecting every part of their lives. Steps such as drawing up a budget or seeking financial advice can help tackle the anxiety and the cause of the anxiety.