United Kingdom Workers Bear Close to £6 Billion in Work-Related Expenses - Over £1 Billion Above the Nation's Entire Overdraft Loan Debt
In a recent report by Conferma, a global leader in virtual payment technology, it was revealed that UK employees are facing significant financial challenges due to outdated payment processes. The average employee loses £222 each year due to delayed or missed reimbursements, and employees are spending an average of £238 per month, or £2,856 annually, on work-related expenses.
The research, from Conferma's 'Invisible Bank Report', indicates that more than three-quarters (74%) of employees believe RTO policies have increased the number of work purchases they're expected to cover. This figure has risen sharply from £72 in 2019, representing a 231% increase, or 168% after inflation adjustment.
Over half (53%) of employees have avoided making a necessary purchase for work to avoid out-of-pocket costs, delaying decisions and disrupting day-to-day operations. More than one in five (20%) employees have had to borrow money from friends or family to cover business expenses, and one in five (20%) have had to rely on friends or family to cover business payments.
The report also found that over two-thirds (68%) of all employees, and 72% of 18-28 year-olds, report personal cash flow problems due to outdated payment processes. Similarly, 82% of 35-44 year-olds report increased out-of-pocket costs since RTO, higher than the 74% average.
Concern is highest among 35-44 year-olds, with 58% fearing career setbacks if they decline work trips. Over half (53%) of employees believe that turning down business travel would harm their career prospects.
However, there is a rising adoption of virtual cards, with more companies shifting from traditional reimbursement models to embedded payment technologies that offer better control, visibility, and protection for employees. When connected to booking systems, virtual cards remove the need for personal spend entirely, easing cash flow issues and enabling faster, more accountable payment processes.
Jason Lalor, CEO of Conferma, stated that employees are not voluntarily lending money to their employers, but are forced to due to outdated and painful corporate payment technologies. He emphasised that this situation creates a growing financial gap between employees and employers, with employees acting as a line of credit for their employers.
In the UK, businesses increasingly adopting a shift toward virtual cards for managing business expenses include companies leveraging payment platforms like Stripe and Mastercard partnerships, which facilitate virtual and digital payment solutions for business costs. For example, Mastercard is advancing digital payment solutions integrated into platforms, and Stripe supports virtual card payments and instant payouts for businesses to manage expenses efficiently.
As the UK workforce continues to grapple with the financial impact of outdated corporate payment processes, the shift towards virtual cards offers a promising solution for both employees and employers. By streamlining payment processes, virtual cards can help reduce financial strain, improve employee satisfaction, and foster a more efficient and productive workplace.
