Octopus Money: How Financial Stress Impacts Retention

Employees in their midlife can often believe they're at the peak of their career. However, new data shows it’s actually the peak of financial stress.

This is otherwise known as the "midlife squeeze," according to Octopus Money, where employees are caught between supporting adult children and caring for their ageing parents.

This financial pressure isn't just a personal issue anymore – it’s actively hurting workplace productivity and driving people to look for new jobs, regardless of how much they earn.

Speaking exclusively with HR Chief Magazine, Laura Noble, Head of Employer Success at Octopus Money, shares the true impact of financial anxiety at work. She also challenges myths about salary and looks at practical steps HR leaders can take to support their teams and retain top talent.

1. Your research suggests financial stress peaks in midlife – what's driving that shift compared to earlier career stages?

It is the combination of pressures hitting at once. Our survey of 2,000 UK parents found that 59% say midlife is more financially stressful than their 20s, and it is easy to see why. 

Supporting adult children and ageing parents simultaneously costs an average of £3,498 a year, on top of their own living costs and retirement needs. 

92% are still contributing financially to their children in adulthood, while almost a third are also supporting their own parents. 

So the squeeze is coming from both directions at once.*

2. Why do you think so many employees feel unable to talk about financial pressure at work?

We are already a nation that struggles to talk about money.

Research we launched last year found that only a third of Gen X and half of Boomers planning to leave an inheritance have actually spoken to their family about it.

Those cultural habits follow people into the workplace, where the stakes feel even higher. Financial stress can carry real stigma, and people worry about being judged or appearing unable to cope.

The good news is that I see organisations challenging this trend every day. This can look like senior leaders setting an example by speaking openly about their own experiences with money; the HR team implementing new financial wellbeing policies; or organisations setting up one-to-one money coaching as a workplace benefit.

3. How is this two-directional financial pressure showing up in employee performance day-to-day?

The numbers are striking. When employees first come to Octopus Money, only 31% feel excited about their financial future, and 62% are unsure they are on track for retirement.

Our research found that one in five midlife employees says financial stress is already affecting their workplace performance.

That finding is consistent with wider evidence: a 2023 Zellis study found that 54% of employees say money worries reduce their productivity.

This is not a private problem, but is sitting in meeting rooms and on project teams across the country.

4. The data shows this affects all salary levels – what does that tell HR leaders about common misconceptions around pay and financial wellbeing?

Across the workplaces we support, a high proportion of employees at every salary level report worrying about money.

Social background can play a role too: for example, even on identical salaries, workers from lower socioeconomic backgrounds are consistently two to three times more likely to say they could not cover an unexpected £500 expense.

The implication for HR is clear. A pay rise will not fix this. But targeted support can: for example, employees from lower socioeconomic backgrounds who received one-to-one money coaching alongside mentoring were 1.5 times more likely to feel comfortable about retirement.

5. With nearly half of employees considering job moves for financial reasons, how real is the retention risk?

Very real, and underestimated. Our data shows that parents who feel financially unsupported are three times more likely to consider leaving their employer.

Yet 76% of employees who receive financial advice through work are more likely to remain at their company.

Retention is no longer just about salary. Employees are increasingly making career decisions based on the quality of support they feel they receive, and financial wellbeing is becoming a deciding factor in where people choose to stay.

6. What are the most practical steps HR leaders can take to better support midlife employees?

Start with the diagnosis. Look at pension participation rates, engagement with existing benefits, and uptake of financial advice among employees aged 40 to 55.

Identify where your people are falling behind before designing new interventions. Then focus on which financial wellbeing support might make the most difference.

Generic webinars might not create engagement, but one-to-one financial coaching could help create big change for people.

For example, on average, personalised financial planning boosts employees' projected retirement income by £7,239 a year, with pension pots projected to be £315,000 larger at retirement than before they received support. 

7. If organisations ignore this issue, what are the longer-term risks for workforce performance and talent strategy?

The costs can compound. Organisations that fail to act will not just lose talent to competitors who offer better support; they will carry the hidden costs of disengaged, financially stressed employees for years.

Financial wellbeing should be a core part of any serious workforce strategy. The employers who recognise that now will be significantly better placed on retention, performance and culture in the years ahead.

*Research conducted by Opinium, among a sample of 2,000 Nat Rep UK parents aged 45-65. The data was collected between 18.02.26 and 02.03.26.