How to help employees afford the auto-enrolment increases
However, automatic enrolment has been successful in getting millions more people saving into pensions, with the number now resting at just over 8 million. The government mandated contribution levels are set to increase over time.
This is because the starting level of contributions under auto-enrolment were not enough to provide a substantial pension for many employees. As of the 6th of April 2018, the contributions stand at 2% for employers and 3% for employees, and they are set to rise to 3% and 5% respectively next year.
Unfortunately, in Britain today, a large proportion of the population are living from pay check to pay check, with the Office of National Statistics suggesting that 16.5 million people of working age have no savings at all. This means that the increases could place increased financial strain on many employees.
While you can’t change the government initiative, you can change your benefits offering to better suit the financial needs of your workforce. As financial stress can lead to poor physical and mental health, it’s important that employers are aware of the services they can provide to keep their employees on the right track.
Simple discounts on shopping and leisure
Discounts are a fantastic benefit for staff in general, but they can be a great help to staff members who are looking to cut costs. However, it is important to make sure that you’re offering discounts that are useful and relevant to your employee base. Everyone has to go food shopping, and most people enjoy a trip to the cinema, but discounts on Yeti spotting in the Alps might not appeal to the wider group.
Salary sacrifice on items
The rate of evolution and advances in technology products like PCs, tablets and smartphones means that employees always have demand for the latest, improved equipment for themselves or their family. However, these items are usually costly, making Christmas and birthdays a bigger financial burden than ever before.
It’s unlikely that the demand for these items is going to lessen considerably anytime soon, so why not offer a salary sacrifice scheme to help employees stretch their pay that little bit further? Salary sacrifice means that employees agree to ‘exchange’ some of their pre-tax salary in return for the item of their choice, and make savings in National Insurance on the total amount sacrificed. Which makes it an efficient way of providing employees and their families with the latest, desirable computing and technology products for use in their home, while still keeping their finances in check.
Impartial financial support
Financial wellbeing is growing in popularity as a wellbeing benefit, with a rising number of employees concerned about money. In 2017, 50% of the UK workforce reported that they were in financial trouble.
There are now many financial wellbeing products for employees that will help them deal with auto-enrolment changes, now and in the future. From financial education to debt consolidation and impartial financial support through an EAP service, there is a rising demand for initiatives that can help staff become more financially stable, all of which are simple and easy to provide.
It’s important to realise that financial worries impact most of your workforce in one way or another. Perhaps auto-enrolment isn’t a concern for them personally, but the chances are they will face some form of financial stress in their lifetime. Organisations can use these simple ideas to work towards creating a happier, more engaged and financially savvy workforce.
This article was provided by Personal Group.
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