The link between financial stress and mental health at work
Money worries affect more than just the bank balance. They take a real toll on mental health.
Many workers are stressed about their finances. But employers often underestimate just how common this is.
Mental Health First Aid England reported in 2024 that:
- 41% of employees cite financial pressure as their top external stressor
- 52% report it negatively affects their work performance
- 80% of financially stressed employees feel anxious or depressed weekly
Money stress can lead to:
- Anxiety and low mood
- Poor sleep
- Relationship breakdown
- Missed work and lower productivity
- Increased staff turnover and recruitment costs
In fact, UK employers lose up to £2.5 billion each year due to absence linked to financial worries.
There’s a clear connection between mental, physical and financial health. It makes sense to look at ways to reduce financial stress in the workplace. One place to start is payroll.
Payroll isn’t just a way to process wages. With the right tools and support, it can play a key role in improving financial wellbeing and easing mental strain.
From regular savings to access to earned pay, payroll can offer practical ways to help employees feel more in control of their money.
Contact us to explore how PayCaptain can improve mental health in your workplace
How financial stress creates a mental health spiral
Financial stress can quickly become a cycle that’s hard to break.
When people feel out of control with money, it creates anxiety, poor sleep and burnout. This affects mental health, which then makes it harder to focus, work well or even stay in a job.
In 2024, MIND’s Big Mental Health Report found that people with mental health problems earn nearly £10,000 less per year than those without. That loss of income can make financial problems even worse.
It becomes a spiral. Worry leads to stress. Stress affects mental health. Mental health issues affect earnings. Lower income adds more financial pressure.
Employers can’t solve every issue. But there are simple ways to break the cycle. This starts with better financial wellbeing support at work.
How access to emergency cash through payroll can reduce financial stress
A washing machine that can’t be fixed. A car that won’t start. An unexpected bill. These moments can tip someone already under pressure with money into full-blown crisis.
Without a financial buffer, employees may feel forced to turn to high-interest payday loans or credit cards. This can trap them in a cycle of debt that’s hard to escape.
Offering help with emergency cash through payroll is a practical and responsible alternative.
Many employers now provide salary advances, giving staff the option to:
- Access a portion of their earned pay before payday, sometimes called a payday advance
- Avoid unaffordable borrowing like payday loans or using high-interest credit cards
Salary advances and emergency cash payments can reduce stress and help employees deal with unexpected bills or expenses. It can be done without derailing their finances.
With PayCaptain, emergency cash payments are easy to access:
- There are no fees for either the employer or the employee
- Advances are funded by PayCaptain, so there’s no impact on business cash flow
- Payments are made using Faster Payments, meaning employees can get the money within minutes
- The emergency cash advance amount is recovered at payroll, making the process simple and automated
Done right, emergency cash help through payroll can reduce stress and help employees avoid falling into a debt spiral.
Discover how salary advances can make a real difference to employee mental health
How payroll can support employee debt management and reduce stress
Debt can feel overwhelming. It often leads to chronic stress, low mood and a sense that there’s no way out.
Many employees carry this stress with them into the workplace. But with the right support, employers can help ease the burden.
Here’s how businesses can provide debt management support:
- Partner with trusted debt counselling services
Employers can signpost their people to free, impartial help such as StepChange or MoneyHelper. These services offer guidance on managing repayments, negotiating with creditors and creating realistic budgets. - Use payroll deductions for repayment plans
Making repayments direct from payroll removes the need to remember separate payments. It’s discreet, automatic and can support people in sticking to agreed plans. - Provide budgeting tools and debt education
Include links to free tools, guides and resources. Help employees understand how to prioritise debts, reduce interest and create a workable plan. - Use payroll software that allows payment splitting. This lets employees send money directly from their net pay to different accounts. Set up through a mobile payroll app, this helps ensure important bills are paid on time. It can also support regular debt repayments. It’s a simple way to stay on top of money and avoid falling further behind.
Debt management support isn’t just about money. It’s about helping people regain control, reduce anxiety and feel hopeful about their future again.
How helping employees reduce commuting costs reduces financial stress
The cost of getting to work adds up fast. In the UK, the average cost of commuting to work is around £136 a month. For many, especially those on lower incomes, that’s a big chunk of take-home pay.
Reducing the cost of commuting can ease financial pressure and improve mental wellbeing. It helps employees feel more in control, less stressed and more able to focus on the job.
There are simple ways to support this through payroll and workplace policy:
- Offer payroll-deducted transport benefits
These include discounted public transport passes, parking subsidies or cycle to work schemes. Deductions like cycle to work are salary sacrifice schemes. The value is deducted from gross pay and the employee pays less tax and National Insurance. The employer may also save on employer NICs. - Support flexible and remote work
Reducing the need to commute altogether is one of the most effective ways to cut transport costs. PayCaptain is a fully remote-working company. - Reimburse mileage and travel expenses quickly
Using flexible payment tools through payroll means employees aren’t left out of pocket waiting for repayment. Payment can be sent as soon as the expenses are submitted and approved.
Small changes in how the business supports travel can have a big impact on financial wellbeing.
How weekly or on-demand pay through payroll reduces money stress
Waiting for payday can be stressful, especially when unexpected expenses come up. For employees living week to week, a rigid monthly pay cycle can make it hard to manage cash flow.
Introducing payday advance options through payroll can reduce this pressure. With weekly or on-demand pay advances, employees can access a portion of their earned wages before payday.
This helps to:
- Cover emergencies without turning to high-cost credit
- Bridge shortfalls between paydays
- Plan better around bills and personal commitments
It’s about improving financial stability and removing the anxiety that can build in the days leading up to payday.
With PayCaptain, these flexible payment options are easy to access and fee-free. As with emergency cash payments there are:
- No fees for the employer or the employee
- Advances are funded by PayCaptain, so there’s no impact on business cash flow
- Employees receive payments into their account every Monday morning for weekly advances. This can help pay for travel or costs associated with work.
- The amount is recovered at payroll, making the process simple and automated
These payments put employees in control of their money and can help them budget better.
Book a demo to see our employee wellbeing tools in action
Helping employees access unclaimed benefits through payroll tools
Many employees aren’t aware of the support they could be getting from government or local authorities. That’s why PayCaptain has an anonymous benefits entitlement checker within the payroll app.
This tool allows employees to enter details about their situation. They answer questions about income, family size and housing. This information is not shared with either their employer or PayCaptain. The system then identifies government benefits, tax credits or local schemes they may be eligible for.
This can make a real difference. For some, it means finding out they qualify for extra income each month. For others, it’s the first step towards getting help with childcare, rent or energy costs.
By making this tool easy to access and completely confidential, PayCaptain helps employees explore what’s available.
Signposting like this can ease financial strain, prevent debt and give people the breathing space they need to get back on track.
Visit our benefits entitlement checker
Improving financial literacy at work to reduce money-related stress
Many people leave school without the skills they need to manage money properly. This lack of knowledge can lead to poor decisions, missed opportunities and long-term stress.
One way to support mental health at work is to offer financial education. This helps employees feel more in control of their money.
Workshops, webinars and online tools can cover essential topics such as:
- Budgeting and tracking spending
- Saving using payroll saving and savings pots
- Understanding credit and avoiding debt traps
- Planning for the future with pensions dashboards
Employers can also give access to personalised advice. This could be through a financial wellbeing app, in-house sessions with an adviser or partnerships with organisations like MoneyHelper.
Including financial education in onboarding and ongoing training helps normalise money conversations and builds better long-term habits. When employees understand how to manage money, they’re better able to handle life’s ups and downs.
Financial literacy gives people the tools to make smarter choices. That supports better mental health at work, fewer money worries and a stronger, more focused workforce.
Final thoughts from PayCaptain
Financial stress doesn’t stay at home. It follows people to work. It affects concentration, productivity and mental health. But with the right tools, payroll software can play a powerful role in changing that.
At PayCaptain, we believe financial wellbeing should be part of every employer’s support package. Not just for those in crisis, but for every employee.
Through flexible pay, emergency cash, payroll savings and financial education, employers can create a workplace where people feel more in control of their money. That builds confidence, reduces anxiety and helps people plan for a better future.
PayCaptain’s platform is built around financial wellbeing. There are no hidden fees for employees or employers, and services like salary advances are funded and delivered quickly, without extra admin.
Supporting mental health at work starts with supporting financial health. Payroll is the perfect place to begin.
