Helping employees navigate tax year end to avoid financial stress
When deadlines loom, it’s understandable that panic may start to set in. The end of the tax year (5 April) is no different, and some of your employees may be feeling under pressure to scramble together all their financial paperwork and use their annual allowances in time.
As an employer, why does employee financial stress matter? And how can you help employees navigate through testing times?
Why supporting employees who are stressed about money is important
Financial stress can affect employees’ happiness, productivity, and confidence – both at home and at work.
Indeed, according to research by CIPD, 31% of people said money worries had negatively affected their work performance. This figure is higher for those earning less than £40,000 a year (37%), but even those earning £60,000 are feeling the effects of money worries, with 22% reporting the same.
The good news? Employers are uniquely place to play a positive role in helping their employees feel less stressed and more positive about their money. In fact, according to Standard Life’s annual employer survey, 68% of employers said financial wellbeing was their most important concern of the year.
Three wellbeing initiatives to help combat financial stress
The impending deadlines of tax year end could be an added strain for some employees. But given that financial stress affects almost a third (31%) of people, it’s important to support all employees – whatever their financial circumstances.
Here are three wellbeing initiatives you could implement today:
1. Keep financial planning top of mind with regular communications
If employees are feeling stressed about money, spending time planning could be a great way to ease the pressure.
Standard Life’s Retirement Voice 2025 report reveals that even a little bit of planning can go a long way to helping people feel more positive about their finances.
To help, consider sending regular communications that promote the benefits of financial planning, and ramp these up during financial pinch points like tax year end. Doing so could remind employees to get organised and get ahead of the deadlines, avoiding that last-minute stress.
If you’re with Standard Life for your workplace pension scheme, you can pick from a range of ready-made campaign materials to help you communicate effectively across your workforce.
2. Raise awareness of making the most of their yearly allowances
Consider raising awareness of the different allowances that may apply to employees’ personal finances, and the steps they can take to make the most of their money before the end of the tax year. This could demystify some of the complexities, and help improve employees’ financial knowledge and confidence in the process.
For instance, you could share guidance on how employees can claim pension tax relief through a self-assessment. This would be useful for those who put extra money into their workplace pension plan after they’ve paid tax and who are higher or additional rate taxpayers. If employees wait until after 5 April to do this, they may miss out on this year's tax relief.
You could also remind employees about their Individual Savings Account (ISA) allowances. They still have time to consider maxing out the £20,000 limit across any Cash or Stocks and Shares ISAs they have before the allowance resets on 6 April.
3. Offer a bonus? Communicate the option to sacrifice it into their pension
If employees have the option to put their bonus into their workplace pension via salary sacrifice, it’s a good idea to communicate how this works and the impact this could have on their future finances.
Indeed, employees could save on tax and National Insurance deductions – and keep more of their bonus in the long run as a result – by putting it into their pension.
By sharing guidance on the pros and cons of salary sacrifice, you can help them make informed decisions about their money, and ensure they don’t miss out on the opportunity to give their pension savings a boost before the end of the tax year.
For more information on how to support your employees, take a look at Standard Life’s financial wellbeing articles for some ideas and inspiration.
Remember, a pension plan is an investment. Its value can go down as well as up and could be worth less than what was paid in.
Tax rules may change in the future. Tax treatment depends on your individual circumstances including where you live in the UK.
The information here is not financial advice. If you're unsure, you should speak to a financial adviser.
This article was originally published on the Standard Life website.
Supplied by REBA Associate Member, Standard Life
Standard Life is a retirement specialist focused entirely on retirement savings and income.
