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Hidden employee debt costing billions

Jane Clack, a money advice consultant at PayPlan, revealed the insight at the recent Health and Wellbeing Conference in Birmingham. The delegates were surprised by these figures.

Clack said, “The statistics highlight the extent to which debt affects people at every level of an organisational structure, from junior apprentices to senior members of an executive team. A misconception still exists that debt only affects people on low incomes, but that’s certainly not the case.”

Over 40 per cent of PayPlan customers on debt management plans earn more than the national average wage of &pound26,000 per year and 10 per cent of PayPlan customers earn more than &pound45,000 each year. People earning high wages usually have more lines of unsecured credit, as they are more likely to be accepted by creditors in the first place.

Clack said, “People wrestling with debt problems can suffer from stress and anxiety, which impacts their working lives. It’s impossible to keep major personal concerns far from your thoughts while in a working environment, leaving many people unable to perform their duties.”

Despite the dedication of human resources departments, some of the largest private, public and third sector organisations continue to suffer from high sickness absence rates, much of it related to the worry that can accompany debt. With over 35 per cent of workplace illnesses attributed to stress, anxiety and depression, accounting for an annual average of 24 sick days per person, it is estimated that debt is costing large employers millions of pounds, and the economy billions of pounds every year.

Clack concluded, “Our customers earning over &pound45,000 per annum possess an average unsecured debt of &pound83,000, just under double their annual salary, a similar income to debt ratio as that found among people at the lower end of the pay scale.

“A third of our customers have an average monthly disposable income of between &pound1,000-&pound4,000, which indicates that debt can affect anyone in an organisation, not just the low paid.”

 

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