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Pensions & Retirement

Millions of workers lack emergency savings and struggle with financial stress, report finds

A report from the City of London Corporation and nudge found around 8.2 million (24%) of employees had no financial safety net. 

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Millions of workers have no emergency savings and are struggling with debt and retirement planning, a report from the City of London Corporation and nudge has found.

Around 8.2 million (24%) of employees had no financial safety net. 

Among higher earners, 27% reported financial stress and 20% said money worries affected their sleep.

Only 27% of employees were happy with their retirement contributions, and 44% either did not know if they were saving enough or did not understand how their retirement savings worked. 

This came despite 94% of UK employers believing their staff were confident in managing their savings.

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The report also found that workers with lower financial capability were less likely to have emergency savings, with 75% reporting no emergency fund compared to 16% among those with strong financial literacy. 

Employees with lower financial capability were also less likely to have a retirement fund and more likely to overspend each month.

Chris Hayward, policy chairman at the City of London Corporation, said: “Millions of people across the UK are understandably struggling with their finances. 

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“Despite the challenging economic environment, many were never taught how to build resilience to manage shocks, nor how to plan for the future. 

“Without urgent action to improve financial literacy and support in the workplace, too many people will continue to face unnecessary financial stress and uncertainty.”

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The report called for employers to prioritise personalised financial well-being support centred on education and real-world scenarios. 

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It also called for Government and regulators to clarify boundaries between guidance and regulated advice and to expand trusted financial education in the workplace.

Employers said they wanted Government-backed financial education resources, public awareness campaigns, and clearer boundaries between financial guidance and regulated advice.

Tim Perkins, CEO and co-founder at nudge, said: “This report shows that workplace financial education plays a critical role in improving financial resilience and health. 

“When people understand how to manage their money, they are better prepared for financial shocks and more likely to improve their overall financial situation and wellbeing. 

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“The impact extends beyond the individual, helping to create healthier families, stronger communities and a more resilient UK economy.” 

Perkins added: “We would encourage Government to consider tax incentives for employers investing in financial wellbeing support, reflecting a trend we are already seeing emerge in the United States.”

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