The study, led by Professor Eva Selenko, which tracked more than 700 UK employees over a year, found that it’s not just how much financial pressure people feel overall that matters, but how that stress changes over time.
When financial worries increase, people become more emotionally drained, feel treated unfairly by their employer, and are more likely to think about leaving their job.
When those worries ease, these negative effects also improve. Researchers describe financial stress as a ‘domino effect’ problem.
Because money underpins so many aspects of daily life, from housing and food to childcare and transport, any strain can be felt across multiple areas at once.
This creates a constant mental load, with people worrying, planning and adjusting their lives to cope.
Importantly, the study shows that even small increases in financial stress can have a noticeable impact, regardless of whether someone is generally well-off or already struggling.
“A worsening financial situation can take a toll on almost anyone,” said Prof Selenko, of Loughborough’s Business School.
The findings also highlight wider consequences for employers and the economy.
Financially stressed workers are not only more exhausted but also more likely to disengage or seek better-paid roles, potentially increasing staff turnover and reducing productivity.
The researchers say tackling financial stress could be a straightforward way to improve both wellbeing and workplace outcomes.
Measures such as fair pay, support with living costs, and greater financial security could help reduce pressure on workers and create healthier, more stable workplaces.
The paper, From pay check to pay check: a dynamic within-person analysis on the relevance of subjective financial stress for exhaustion and work-related attitudes, was published in the Journal of Business and Pschology.
ENDS