Introduction
Unused annual leave is a significant issue across UK workplaces. Research from Breathe found that 51% of UK workers did not take their full annual leave allowance in the previous year. Even more concerning, almost half (48%) of those who left holiday unused reported feeling burnt out by the end of the year.
Heavy workloads, tight deadlines, staff shortages and workplace cultures that reward long hours often leave employees feeling that taking time off is impossible. For many people, annual leave becomes something they plan but never actually use.
Although this may appear to demonstrate commitment or dedication, consistently building up unused annual leave can be a warning sign of something much more serious. Employees who rarely disconnect from work are often at greater risk of work-related stress, fatigue and burnout, all of which can have significant consequences for both individual wellbeing and organisational performance.
For employers, encouraging staff to use their annual leave should not simply be viewed as an employee benefit. It is an important part of supporting mental health at work and reducing the risks associated with prolonged workplace stress.
Why Do Employees Have Unused Annual Leave?
There is rarely a single reason why employees fail to take all of their holiday entitlement. More often, unused annual leave is the result of workplace pressures that make employees feel unable to step away.
Increasing workloads are one of the biggest contributing factors. Employees may worry that taking a week’s holiday will simply create two weeks’ worth of work when they return. Emails continue to arrive, projects continue moving and deadlines rarely stop because someone is on leave.
Some employees also feel guilty about taking time off if their colleagues are already under pressure. In smaller organisations or understaffed teams, annual leave can feel like an additional burden placed on everyone else.
Others work in cultures where long hours are quietly rewarded. Although managers may encourage staff to book annual leave, employees sometimes believe that those who remain constantly available are viewed as more committed or more likely to progress.
Technology has also blurred the boundaries between work and personal life. Smartphones and remote working mean many employees continue checking emails, answering messages or attending online meetings while supposedly on holiday. As a result, they never truly disconnect, meaning the restorative benefits of annual leave are significantly reduced.
When these behaviours become normal, unused annual leave is often a symptom of wider organisational issues rather than an individual choice.
The Connection Between Unused Annual Leave and Work-Related Stress
The human brain is not designed to cope with continuous pressure without opportunities to recover. Just as muscles need time to repair after physical activity, our minds require periods away from work to restore concentration, emotional resilience and energy.
When employees repeatedly postpone holidays or work through annual leave, stress can gradually accumulate over weeks or months. Initially, this may simply feel like tiredness or irritability. However, over time, prolonged exposure to workplace demands can contribute to work-related stress, anxiety and eventually burnout.
Employees experiencing chronic stress often report difficulty concentrating, reduced motivation, poor decision-making, disrupted sleep and increased emotional exhaustion. These symptoms rarely appear overnight. Instead, they develop gradually as recovery time becomes increasingly limited.
Taking annual leave provides a valuable opportunity to interrupt this cycle.
Stepping away from work allows employees to mentally detach from deadlines, meetings and ongoing responsibilities. Whether someone spends their holiday travelling, enjoying hobbies, spending time with family or simply relaxing at home, these breaks allow stress levels to reduce and energy levels to recover.
Research consistently shows that employees who regularly take meaningful breaks often return with improved focus, creativity and productivity. Rather than reducing performance, taking annual leave frequently helps employees perform better over the long term.
Unused Annual Leave, Presenteeism and the Cost to Employers
The consequences of unused annual leave do not necessarily end with an employee feeling tired. When people continue working without enough opportunity to recover, they may eventually be physically present at work but unable to perform at their usual level. This is known as presenteeism.
Presenteeism is particularly important when considering work-related stress. An employee may continue attending work despite feeling mentally exhausted, overwhelmed or unable to concentrate effectively. They may still be answering emails, attending meetings and completing tasks, but their productivity, decision-making and overall performance can be affected.
This can create a hidden cost for employers. Unlike sickness absence, presenteeism is not always immediately visible. An employee is technically at work, so the organisation may not recognise that their health is affecting their ability to work effectively.
Deloitte’s research highlights just how significant this issue can be. Their analysis estimated that poor mental health costs UK employers around £51 billion every year, with presenteeism the largest contributor at approximately £24 billion annually. Deloitte defines this in terms of people working despite illness and not performing at their full ability.
This does not mean that unused annual leave directly causes presenteeism or work-related stress. However, consistently failing to take time away from work can be a warning sign that employees are not getting enough opportunity to recover from workplace demands.
There is an important difference between planned time away from work and being forced to step away because stress or poor mental health has reached a point where an employee can no longer cope. Annual leave gives employees an opportunity to disconnect, recover and return to work before pressure becomes overwhelming. When people instead continue working through exhaustion and have unused annual leave, the result can be a cycle of stress, reduced performance and eventually sickness absence.
For employers, this is why unused annual leave should not simply be treated as an HR administration issue. Patterns of employees regularly carrying large amounts of unused leave may prompt a wider conversation about workload, staffing, management expectations and the organisation’s approach to mental health at work.
Why Employers Should Pay Attention to Unused Annual Leave
Deloitte’s research also found that for every £1 employers spend on supporting the mental health and wellbeing of their workforce, they receive an average return of around £4.70 through improved productivity.
The message for employers is clear: supporting employees to take their annual leave is one part of creating a healthier working environment, but it should sit alongside a wider approach to identifying and managing the causes of work-related stress.
For employers, unused annual leave should never simply be viewed as an administrative issue.
Large amounts of outstanding holiday can provide valuable insight into the health of an organisation. If employees consistently unused annual leave, employers should ask why.
Is workload becoming unmanageable?
Are employees worried about falling behind?
Is there sufficient cover when people are away?
Do managers genuinely encourage staff to disconnect, or do employees feel expected to remain available throughout their holiday?
These questions often reveal underlying organisational pressures that contribute to work-related stress.
When employees feel unable to take time away from work, the risks extend beyond individual wellbeing. Chronic stress is associated with higher sickness absence, reduced engagement, lower productivity, increased staff turnover and greater recruitment costs.
Annual Leave Cannot Fix Poor Working Conditions
Although taking annual leave is essential, it should never be treated as the solution to workplace stress.
Some organisations encourage wellbeing days or remind employees to book holidays while failing to address the underlying causes of excessive pressure. Employees may return from a relaxing week away only to face the same unrealistic workloads, staffing shortages and constant deadlines they left behind.
In these situations, annual leave simply provides temporary relief before stress quickly builds again.
Sustainable improvements in employee wellbeing require organisations to identify and reduce the workplace factors creating stress in the first place.
Work-related stress is rarely caused by a single difficult week. More often, it develops because organisational systems, expectations or management practices consistently expose employees to excessive pressure without providing adequate support.
This is why managing mental health at work requires more than encouraging people to take a break. It requires employers to understand where stress is coming from and take practical steps to reduce those risks.
Managing Mental Health Risks in the Workplace
For employers, this means taking a proactive approach to mental health at work. Looking at patterns such as unused annual leave, increased absence, presenteeism, workload concerns and employee feedback can help identify where workplace pressures may be affecting wellbeing.
A mental health risk assessment can provide a structured way to identify potential risks, understand who may be affected and determine what practical measures can be put in place to reduce them. Rather than waiting until stress results in long-term absence or burnout, organisations can use risk assessment to identify concerns earlier and take action.
At Health & Safety Hub, we support organisations in understanding and managing mental health risks in the workplace. Whether you are looking to strengthen your approach to workplace mental health, improve your risk management processes or equip your organisation with the right knowledge and tools, our Health & Safety Hub resources can help.
For organisations and managers looking to develop their understanding further, our Risk Assessing Mental Health course provides practical guidance on identifying and assessing mental health risks in the workplace. Find out more about the Risk Assessing Mental Health course.
Ultimately, annual leave should give employees the opportunity to switch off and recover, but it cannot compensate for a workplace that consistently creates excessive pressure. By combining a healthy approach to reduce unused annual leave with effective mental health risk management, employers can help reduce work-related stress, support employee wellbeing and create a healthier, more sustainable workplace.