Building employee financial wellbeing

In 2026, households face a persistent squeeze on spending power. With inflation still pressing on everyday costs and wage growth struggling to keep pace, financial pressures are taking their toll on employees’ lives. In the UK, the cost of services rose by 4.5% from November 2024 to November 2025 – more than double the Bank of England’s 2% target.

 

As a result, financial wellbeing has become a workplace concern that impacts organisational performance and long-term success. In such an environment, financial wellbeing benefits are no longer peripheral perks; they are core components of a modern, effective employee value proposition.

 

 

The business case for financial wellbeing

Research reveals that a significant proportion of workers bring money worries into the workplace, with nearly a third reporting that financial stress has negatively impacted their performance at work. This often presents itself as either absenteeism or presenteeism.

 

Employers must, therefore, adapt to the fact that employees’ financial concerns are no longer confined to their personal lives. Initial findings indicate that organisations with robust rewards and financial wellbeing initiatives not only report higher engagement and financial control among staff but also see productivity gains worth more than £7bn annually.

 

 

Alternative incentives beyond salary

Traditional pay rises, while important, cannot alone address the range of financial pressures faced by employees. Innovative incentives that complement base salary are, therefore, vital.

 

Tax-efficient arrangements such as the Trivial Benefits Allowance (TBA), currently capped at £50, provide a way to reward staff without adding to their tax burden. There is a growing argument for this limit to be reviewed and increased in line with inflation, ensuring the allowance remains meaningful over time.

 

Increasing the cap would give employees a tangible boost to their disposable income, delivering £6.7 billion of direct tax-free support to workers yearly. This in turn contributes to helping workers manage everyday expenses more effectively while reducing financial stress to improve focus and overall wellbeing at work.

 

What’s more, gift card rewards are widely recognised as effective incentives for today’s workforce. Research by the Gift Card & Voucher Association reveals that 85% of employees believe that small rewards make them feel more valued and strengthen their relationship with their organisation, while a further 88% of recipients reported that a £50 gift card made a meaningful difference to their everyday life.

 

By expanding the use of gift cards and other non-cash rewards, employers can significantly boost team motivation, while retaining and recognising staff. In the face of ongoing cost pressures, these incentives move beyond ‘nice-to-have’ perks to become targeted, effective tools within a broader financial wellbeing and engagement strategy.

 

 

Modernising pay cycles

Rising living costs, volatile household expenses and a growing reliance on short-term credit mean that the traditional end-of-month pay cycle no longer reflects the financial reality for many workers. For employees living paycheque to paycheque, even small timing mismatches between income and outgoings can create significant stress.

 

Access to earned wages ahead of scheduled pay days through digital payroll platforms is, therefore, an increasingly valuable tool. These systems allow employees to draw out wages they have already earnt, helping to bridge the gap between paydays while reducing reliance on high-cost credit. By offering this kind of financial flexibility, employees can manage unexpected expenses and better plan their finances, reducing stress and supporting overall wellbeing. This support enables staff to remain focused, engaged and in control of their financial circumstances.

 

 

Making financial wellbeing a reality

Financial wellbeing encompasses not only compensation but also the tools, education and support that enable employees to manage their finances confidently.

 

Technology plays a key role. By integrating benefits with payroll, HR and B2B payment systems, employees have direct control over their finances through a seamless digital interface.

 

Amid rising levels of financial anxiety among employees, prioritising financial wellbeing is essential. Organisations that invest in these programmes foster a more resilient and engaged workforce while also strengthening their own business outcomes. In this way, supporting employees’ financial wellbeing is not just a benefit for staff, but a strategic advantage for the organisation, driving clear and measurable business success.

 

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Tessa Unsworth is Global Product Director at EML Payments

 

Main image courtesy of iStockPhoto.com and fizkes