24 March marks the start of Debt Awareness Week 2025, a topic that can be difficult for employees to speak about openly in the workplace. Here, Paul Ball explores how employers can support employees who are struggling with debt issues.
Article / 18 Mar 2025
Debt Awareness Week 2025: Supporting employees
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Statistics from the Financial Conduct Authority (FCA) in 2024 showed that 28% of those surveyed in the UK were not coping financially or were finding it difficult to cope.
Talking about debt is a taboo topic for some, who believe that openly admitting they are struggling with debt is something that could be seen as a failure – but this should not be the case, and employees should know that their employer will provide support in addressing any financial difficulties they are having.
Debt can come in all shapes and sizes – whether that be the different causes of debt, or the length of time people are affected by it. Regardless of this, the impact that debt may have on an employee can be significant, leading to stress and anxiety and in severe cases to potentially more serious mental health issues, disengagement, increased mistakes, poor attendance and long-term sickness absence. Where any sickness absence does happen, if salary during that absence is limited, e.g. to SSP only, this could exacerbate the employee’s financial problems and further impact their mental health or recovery.
While an employer cannot be expected to wave a magic wand and solve an employee’s debt problems, there are things that an employer can do to help employees through what will nearly always be a difficult time.
Many organisations have services available to staff such as Employee Assistance Programs (EAPs) which give employees a chance to speak to trained counsellors confidentially about any issues they may be having. If employees do not feel confident in speaking openly to colleagues about their debt issues, then doing so confidentially via an EAP service may be a good route and can provide employees with tips on how to reduce the impact debt may be having on their mental health. Even if employees do openly engage with their employer about their financial problems, then EAPs can still be invaluable to employees to get professional support to help reduce the potential impact of this on their mental health.
Sometimes debt can be the result of a deeper issue than overspending against the level of their salary. For instance, any addiction, such as drug and/or alcohol dependency can often lead to financial struggles, as can gambling addictions which are becoming an increasing problem due to the ease with which people have access to gambling websites at the touch of a button. EAPs can prove useful in these circumstances, but employers should also be aware that issues with addiction could be a factor affecting employees’ mental health, and so should exercise caution when organising office parties or sweepstakes for example, as these may be triggers which can lead to a downward spiral for some employees. Signposting support on invites/ sign-up emails is therefore often a good idea.
Some employers may be able to help struggling employees with interest-free loans, which can help to reduce the impact of debt without adding additional problems of interest repayments further down the line. Employers can also help with directing employees to impartial debt advice or reputable credit agencies who may be able to assist them if the employer is unable to offer an interest-free loan.
While the above approaches can help an employee tackle debt when it’s already a problem, there are also steps that employers can take to help educate employees to avoid certain circumstances which might lead to debt in the future.
For instance, providing financial wellbeing training could be invaluable in helping employees understand their money and the “Dos and Don’ts” when it comes to managing money responsibly.
Some tips that employees could learn from training may include:
- Checking their bank balance regularly – to help ensure understanding about how much money is left before their next payday.
- Budgeting tips – to help get into a practice of setting financial goals that will allow better management of spending in certain areas (for instance, allocating X amount for petrol each month, and Y amount for morning coffees). Also look at what spending is essential, and what isn’t.
- Not letting mood affect spending – for instance, if someone has had a bad day, being careful not to go on a shopping spree to make themselves feel better if they can’t afford to do so.
- Setting up direct debits for bills – setting up direct debits for household bills to come out of their account at the start of each month for instance means they are paid for straight away, and bills don’t pile up. Outstanding bills are a common cause of debt, so managing these effectively can reduce the risks of financial problems.
- Saving, where possible – we’ve all heard the term ‘saving for a rainy day’ and this is a good tip – putting a bit of money aside into savings each month will mean that if unexpected expenses do crop up, they are in a better position to deal with this.
As the FCA statistics show, debt and financial struggles are something that impacts a lot of people – so those struggling with finances should know they’re not alone and support is available. Also, an employer should be aware that it’s highly likely that some employees within their organisation are experiencing debt, so it’s important to have a support structure in place if anyone needs help.