What low-cost financial wellness benefits are on the market?

The trend for financial wellness in the workplace is a fairly recent one but one that is gathering momentum as people become increasingly anxious about their finances.

Importantly though, very few employees concerned with financial wellness define it in terms of their retirement and pensions, which has historically been the focus on most employer financial education programmes.

Rather, it's the everyday financial stress felt by employees that is having an impact on their wellbeing at work, and in turn on their productivity and on the business itself.

According to a 2017 study by PwC into employee wellness, employees who are stressed about their finances are nearly five times more likely to be distracted at work and three times more likely to spend five hours or more per week dealing with financial matters at work.

Stressed employees are also twice as likely to miss work on account of their personal financial issues and more likely to cite health issues caused by financial stress. Also from a recent study by financial wellbeing company Neyber, 82% of employers believe that employee financial health is important to the organisation as a whole.

It's just as well then that these progressive employers are taking on the responsibility of solving these issues and challenges by expanding their programmes to encompass a broader scope of employee financial wellness. Here is a selection of cost-effective solutions available to employers to help their employees directly with the cost of living:

1) 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.

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.

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) 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.

4) 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.

5) Salary-deducted loans and financial education

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 and conveniently from the employee's salary, with minimal administration required by payroll. From the Neyber study, 48% of employees are borrowing to meet basic financial needs, so the demand for fair, affordable debt consolidation solutions h as never been greater. Â

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. The same study by Neyber highlighted that 18% of employees did not know what their credit score was and did not regularly check it. So managing the path to better credit through increased education is crucial in driving greater employee financial wellbeing.

Each one of these initiatives offers a low or no cost solution to your business that could have a big impact on the wellbeing of your employees, reducing financial stress and improving engagement, motivation and productivity.

Andy Philpott is marketing and sales director at Edenred UK.

This article was provided by Edenred.