How employers can use benefits to help employees manage their debt

Recent research carried out by financial solutions provider Neyber found that 58% of employees have been affected by financial worries in the last year, 54% have suffered mental and physical effects of financial worries and 48% have borrowed to meet basic financial needs.

Recognising that money concerns are affecting the physical and mental health of staff, a growing number of organisations are embracing this by introducing financial education and benefits in a bid to improve employees’ wellbeing and reduce stress caused by these concerns.

So what exactly can employers do to help improve their employees’ financial wellbeing and in turn boost their motivation and performance? And which strategies are easy to implement at minimal cost?

1) Financial education and affordable loans

Salary-deducted loans give your employees access to affordable finance for a variety of purposes, including debt consolidation, offering them transparent fixed rates and fairer finance.

By consolidating existing debt into one manageable loan, employees can save a significant amount of money every month. Payments are deducted directly from the employee’s salary, with minimal administration required by payroll.

Many employee loan companies offer additional support in terms of financial education resources and tools, helping employees to manage their finances better, which means that as an employer you can commit to the long-term financial wellbeing of your people.

Early indications from employers include a reduction in employee absences, increased productivity and improved employee engagement. It also helps break down barriers and makes talking about finances in the workplace less of a taboo topic.

2) Employee Savings

For a very low cost per head, you can essentially help employees stretch their pay further and feel a tangible saving every time they shop or spend. Regardless of shape or size, this type of scheme can be tailored to suit any organisation interested in easing financial stress for their people.

Under the scheme, employees are given access to discounts and offers that can include a range of discounted gift cards, instant eGift cards, and online discount codes for everyday spending, such as supermarkets, or to help with those larger purchases, such as technology or holidays.

3) Cycle to Work schemes

This is a low-cost, win/win benefit for all parties, where employees can hire a new bike under a salary sacrifice scheme managed by their employer. They can choose from a wide range of different makes and models at an approved retail partner, saving up to 42% on the price of a new bike and/or safety accessories.

One of our recent studies on the topic found that cycling to work is a vital ingredient for employee wellbeing and performance. Encouraging fitness and good health has positive benefits for employees as individuals in their personal lives, as well as reducing sick days, improving engagement, performance, and general resilience levels.

Again, any employer of any size can get a scheme up and running. Not only is it a highly valued employee benefit, but it is better than cost-neutral, creating employer NI savings for your business.

4) Shopping cards

Another flexible benefit which allows employees to load a proportion of their salary onto a shopping card each month, with 5% added by the employer for free.

The card can be used in a wide range of participating retailers as well as online and over the phone. Whether your employees choose to buy everyday essentials or save up for big one-off purchase like a holiday, they will always have a bit of extra money to spend every month.

5) Childcare Vouchers

With possible savings of nearly £1,000 per year, or double if both parents are eligible, childcare vouchers provide a very welcome financial boost for your employees, as well as reducing your own costs through the associated National Insurance savings. It is a guaranteed way to help your working parents cope with the financial burden of childcare.

Childcare vouchers can be used to pay for all types of registered childcare across the UK, from nurseries and childminders to after-school clubs and holiday care. They can be implemented and managed via a simple to use online system that your employees can access anytime and anywhere.

Each one of these strategies offers a low or no-cost solution to your business that reduces the burden of financial stress for your employees and has a big impact on their physical and mental wellbeing as a result.

Andy Philpott is marketing and sales director at Edenred UK.

This article was supplied by Edenred UK.