While 41 per cent had experienced a rise by May 2020, this was exacerbated by further months of lockdown restrictions, according to the findings from financial services firm Close Brothers – which are revealed on the first day of Mental Health Awareness Week 2021.
The company said the new report, Expecting the unexpected: a spotlight on preparing for a crisis, highlights the extent to which the past 12 months have changed the financial plans of employees across the UK.
Close Brothers also said the findings confirm “not just that the mental health of employees has been severely impacted by the pandemic, [but also that] its impact has significantly increased as a result of the year of numerous lockdowns”.
The firm added that over the past year, the percentage of 18- to 34-year-olds experiencing mental health worries has risen to 63 per cent, and among those aged 55 and above it has rocketed by more than a third to 37 per cent.
Worries about financial and physical health have also been hit by a year of lockdown. Around two in five employees have experienced an increase in worries about their financial health – with women significantly more affected (44 per cent) than their male peers (34 per cent), but those aged 18-34 reported suffering the most, with more than half experiencing greater money worries.
Mental health and finances worries are often co-dependent, with the latter being a significant cause for stress and anxiety, Close Brothers also noted.
However, it also said that one of the positive outcomes of the last year is that many of those affected are taking steps to build back with greater resilience on all fronts. More than half of employees either have made or plan to make changes to their financial preparedness – notably 73 per cent of 18-34 year olds and 65 per cent of 35- to 44-year olds.
Furthermore, 30 per cent of UK employees are now more confident in their ability to weather a fresh financial storm compared to when the pandemic hit, rising to 36 per cent among those aged between 18 and 34.
Jeanette Makings, head of financial education at Close Brothers, said tackling the pandemic’s impact on employee mental and financial health, “and providing the support needed, even as the majority of employees continue to work remotely, is an area of growing importance for organisations”.
She added: “Mental wellbeing has always been impacted by poor financial wellbeing, but over the last 12 months this has touched more people and some have been particularly badly affected.
"Sectors have been hit at all levels and so it has never been so critical to ensure that everyone understands and is confident about the choices they have so they can make the absolute best decisions with the money they have. This is where employer can help. An employer-led financial wellbeing strategy with hyper-personalised guidance and insight, can play a key role in enhancing the mental and financial wellbeing of their employees.”