Most workers are struggling to meet basic living costs leading to a sharp decline in their confidence in their retirement plans, according to new research published today.

Advisory firm WTW said its survey of 6,000 UK employees revealed a 'disconnect' between the financial wellbeing support workers want from employers and what companies actually deliver.

Its 2024 Global Benefits Attitudes Survey found 89% of employees worry about paying for basic living costs, with four-in-ten extremely worried.

Employees ranked food (77%), housing (71%), transportation (71%) and interest charges (66%) as their main cost concerns.

The number of employees who reported living payday-to-payday climbed from 36% in 2022 to 40%, while the number of employees who said they were worse off financially compared with a year ago increased from under a quarter (24%) in 2019 to 40% this year. 

Nearly half of employees (45%) say they are not on the right financial track and more than a quarter (28%) expect their financial situation to get worse over the next year. On top of that, 59% said money concerns were having a negative impact on their overall wellbeing, resulting in higher levels of stress and anxiety.

Helen Gilchrist, head of defined contribution consulting at WTW, said: “High inflation combined with the aftermath of a once-in-a-generation pandemic is causing many employees to feel overwhelmed and discouraged about their financial situation, which is affecting overall wellbeing.”

She said employers need to take action to improve financial wellbeing within their organisations.

Growing financial problems and uncertainty with inflation were also affecting employees’ retirement confidence and savings, according to the survey.

Nearly four-in-ten (39%) older workers (age 50 and over) expect to work past 70, a sharp rise from 27% two years ago, and 31% before the pandemic. Meanwhile, eight in ten workers (79%) admit they are not saving as much for retirement as they should be, and less than half (47%) are on the right track to retirement.

Ms Gilchrist said: “Employer retirement programmes, and specifically defined contribution plans, remain the primary path for employees to save for retirement.  With challenges meeting their day-to-day expenses while still planning for retirement, employees are looking for help from their employer to build a retirement nest egg, but they also report needing flexibility for emergencies and a desire to maximise their benefits.”

• The 2024 Global Benefits Attitudes Survey was conducted from January to March. Respondents included 6,000 UK employees working at medium and large private sector employers, representing a broad range of industries.