What does festive planning look like in your organisation? Are you winding down projects and arranging Christmas parties? Or ramping up activities for the busiest time of the year?
The festive season is a time of joy and togetherness, but amid the fun and chaos, many employees will be facing financial pressures that make this time of year stressful, overwhelming and lonely.
Why supporting employees’ through financial difficulty matters
Supporting employees through financial difficulties can:
- Strengthen team resilience and productivity
- Reduce absenteeism and illness related to financial stress
- Boost morale
But the benefits will also be longer lasting. Addressing financial difficulties contributes to a supportive and inclusive workplace culture, and demonstrates a commitment to equity and care across all levels of the organisation. This can enhance the overall value that employees derive from their employment, building loyalty and trust.
6 common financial challenges employees face during the festive season
Here are six financial challenges that may be more prevalent for your employees around Christmas and New Year.
- Cutting back on essentials
Last Christmas, Fair4All Finance found that 56% of financially vulnerable adults would be cutting back on essentials to afford the holiday celebrations. This often means making tough sacrifices, such as turning off the heating, skipping meals or missing bill payments, to buy gifts and host gatherings.
- Increased borrowing
In 2023, the Money and Pensions Service found that about a quarter of people relied on borrowing to cover the cost of Christmas. Many turned to credit cards, buy-now-pay-later schemes, overdrafts, or even loans from friends and family.
- Overspending online
Research from Experian and Reward predicts online spending this Christmas will exceed £1.1billion. The convenience and instant gratification of e-commerce, combined with targeted advertising, make overspending easy and recovery difficult.
- Financial scams
Scammers often exploit the festive season when people are busy, distracted, generous and spending more online. Common scams include fake charity appeals, phishing emails, delivery, romance and ticket scams, and online shopping fraud, leaving many financially and emotionally devastated.
- Mental health related money worries
Financial and social pressures at this time of year can increase stress, anxiety, depression and many other mental health challenges. For those with pre-existing mental health problems, this period may trigger ‘crisis spending’,making it even harder to keep track of spending, repayments and cashflow.
- Loneliness and talking about money
Christmas can amplify feelings of isolation. Some people may be physically away from family, or grieving lost loved ones, while others feel emotionally disconnected from their communities and those around them. This may make opening up about financial struggles even harder than usual, and many will be keeping money worries and secrets to themselves.
How employers can help
Employers have the opportunity to ease financial stress for their teams through practical and compassionate initiatives:
1. Reshare and reframe workplace benefits
Highlight existing benefits that can alleviate financial strain. For example, communicate discounts, rewards, or Employee Assistance Programme (EAP) services in the context of festive financial challenges. Provide practical examples of how these can help employees save money or access support.
2. Signpost credible resources
Regularly remind employees about external support services. Useful resources include:
- MoneyHelper for bill and debt prioritisation tools
- Citizens Advice for financial guidance, fraud protection and consumer rights
- StepChange for debt support
- Help for Households for money saving tips on household bills
3. Train Money First Aiders
Empower employees to support their peers by training them as Money First Aiders. This self-paced, online course equips participants with the skills and confidence to have constructive conversations about financial challenges without offering advice. It’s an affordable yet impactful way to promote financial wellbeing at work.
4. Establish an Employee Resource Group (ERG)
Create a space for employees to connect, share experiences, and support one another through the festive period and January blues. An ERG focused on financial wellbeing can help normalise conversations about money worries and build a sense of community.
Final thoughts
Demonstrating a commitment to financial support during the festive season can make a meaningful difference for employees. These initiatives help address immediate challenges, improve mental health, and foster a culture of care. Simple actions like reframing benefits, signposting resources, and training Money First Aiders can empower employees to thrive now and throughout the year.
About the author
Stacey has 16 years of experience in the investment industry, working for global corporates, fintechs and startups, in Europe, Asia and Silicon Valley. She has been an accredited financial coach since 2016. Stacey set up her own financial coaching business in 2018, with a focus on financial wellbeing and values-led money management. Stacey joined a UK start-up in 2021 to co-develop the first digital financial coaching experience for the workplace. She has various financial and investment qualifications and two years of psychotherapy studies. She Co-Founded Money First Aid in March 2024, a training course for employees to support colleagues facing financial difficulty.
