Financial inequality in the world of work

Let’s talk about financial inequality in the world of work.

In 2022, households in the bottom 20% of the population had, on average, an equivalised disposable income of £13,218, whilst the top 20% had £83,687, according to The Equality Trust. 

Frontline staff, including those who work in retail, construction and manufacturing, earn less than £27,000 a year, on average compared to the national average of £33,000. 

The value of work is a hot and complicated topic, but I’m going to steer clear of comparing footballer salaries with everyone else’s. Instead, I want to discuss how financial inequality goes far beyond the income gap in this country.

Frontline and deskless workers, such as supermarket staff and carers, are not only being paid less than those who are office-based, but they are often on insecure contracts without the same access to company benefits.

This is because company benefits are typically accessed via a workplace desktop and require a work email address. 

What’s more, many companies base their benefits costing on a percentage of employees’ salaries. So the more you earn, the more benefits (or higher value services) you may be able to access. Or the smaller the salary, the fewer are on offer.

And it’s not fair.

During the pandemic, 10.6 million of these workers became key in the country’s survival, providing essential services despite risk to theirs and their families’ health. Others, such as those who work in hospitality and events, saw their industry evaporate overnight. 

Since then, as the world recovers, we’ve seen hundreds of thousands of under-appreciated deskless workers, such as nurses and factory staff, on strike for better pay and conditions as the cost of living increases, with upcoming action expected this year in retail. Isn’t it about time we gave these workers our focus?

Financial inequality is complex and multi-faceted, and I don’t have all the answers. But there are things that can be done to move us in the right direction. 

According to research 66% of working adults in the UK fall into the ‘advice gap’ - where they cannot afford financial advice or do not have the wealth to be suitable. Yet, most people could benefit from financial education and guidance to give us the skills and confidence to manage our money effectively.

Money worries are one of the leading causes of stress, and affect our work, relationships as well as our mental and physical health.

Yet almost half (49%) of HR departments don’t see their staffs’ financial wellbeing as a priority, according to the The Chartered Institute of Personnel and Development (CIPD). The professional body is now calling for employers to take more responsibility for their workforces’ financial wellbeing and to recognise the moral and business case.

We also know that the current financial wellbeing benefits need work. Web-based platforms aren’t suitable for the 14 million frontline staff who don’t work at a desk, and the educational content isn’t hitting the mark. More than 60% of employees say their current financial wellbeing offering is not relevant or useful. So, what can you do?

Claro Wellbeing has come up with a solution where frontline workers are the focus. As far as we know, we’re the only financial wellbeing provider in the UK that delivers an engaging and accessible programme entirely over WhatsApp.

Eight in 10 people use WhatsApp in this country, averaging 37- 40 minutes of usage a day, so utilising it to deliver financial benefits is a real leap towards better accessibility and engagement for typically hard-to-reach employees.

Using technology to close the financial inequality gap is a no-brainer - and many firms are doing great work in this space. However, we need to broaden our approach in the workspace and focus on the employees who, for too long, have fallen through the cracks.