Hastee, the earnings on demand technology provider, has today launched a new research report that uncovers Londoners’ attitudes to earning and spending. Insights include the financial stresses resulting from the pandemic, with Londoners going overdrawn and relying on other sources of money merely 13 days after payday, on average.
UK personal finance concerns centre on London, with two thirds (66%) reporting that the stress from finances is having an impact on their lives. 26 per cent say it’s impacting their sleep, others say it’s impacted their social lives (22%, higher than the 19% UK average), relationships with partners (16%), relationships with family (15% – with London leading the UK), health (14%), and concentration at work (13%). Worse, Londoners are more likely to have lacked the funds to pay for a commute or groceries at 16 per cent, more than any other region in the country.
Almost half (43%) want more frequent pay options, more than any other part of the country. This correlates with higher living expenses, like house prices and rents at double the UK average. With a lack of flexibility, 46 per cent of Londoners turn to high-cost credit more than once a quarter – more than anywhere else in the UK.
Londoners lead the country in:
- Needing to borrow money (23%) and are the biggest users of credit cards (89%), with ten per cent regularly in debt, and using credit cards between paydays (41% vs 36% UK average)
- Using high-cost credit once a month (22% vs 16% UK average)
- Applying for high-cost credit knowing they can’t repay (70% vs 59% UK average)
64 per cent say that had they had the option of accessing their pay early this would have stopped them relying on high-cost credit since the outbreak of COVID-19 from February. Additionally, over this period, exactly half of Londoners have used at least one form of loan, credit, or overdraft more than they did before the outbreak, and 39 per cent have been unable to make an essential purchase due to lack of readily available cash.
The impact on business
When it comes to working, Londoners are stressed from the frequency of their pay (15%) and many have called in sick due to financial stress (13%, leading the country). 84 per cent of London workers consider how frequently they get paid when job hunting. In fact, 63 per cent would be more likely to stay with an employer who offers flexible payment options. Despite these financial challenges and their impacts, less than a third (29%) of Londoners are offered a financial element in any employee wellbeing programmes.
James Herbert, Hastee CEO and founder, said, “Londoners, in particular, have felt the liquidity squeeze during 2020’s challenging times, facing higher living costs as well as the after-effects of turning to high-cost credit options. These are causing serious stresses as a result, affecting personal and working lives.
“The monthly pay cycle is not flexible enough to allow workers to manage without recourse to damaging credit. It needn’t be this way, especially considering that partway through their pay cycles many will have already earned the money to avoid doing so – if only they could access it flexibly.
“Earnings on demand gives employees greater visibility and ownership of their money, and such solutions are often free to the employer, require minimal time and effort to integrate with existing payroll systems and do not impact cash flow. They are a huge benefit when offered as part of employee wellbeing programmes, and measurably improve workers’ mental and social wellbeing.”
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