How financial education can support pay strategy
Pay rises and other employer pay strategies need to be bolstered with benefits and financial education, says financial wellbeing and retirement specialist WEALTH at Work.
Jonathan Watts-Lay, WEALTH at Work director, says that while pay rises are likely to lag behind inflation in the near term, it is important that employers ensure they are supporting staff with the cost of living crisis.
He says: “There are many ways this can be achieved and it is a crucial part of any financial wellbeing strategy.
“This may include providing help in areas such as the benefits offered by the employer, including discount schemes (eg money off grocery shopping), help with financial planning including debt support, and salary sacrifice schemes to help reduce costs for travel, mobile phones, gym passes and health and dental care.”
Watts-Lay says there are also practical steps that employees can take to save money that they may not have considered, including cancelling unused subscriptions or memberships, shopping around for better deals on car and household insurance on renewal, finding cheaper broadband and mobile deals and switching brands on the regular shop.
He says: “While some seem small, they all add up. Rising energy costs are a big concern, so things like avoiding using tumble dryers, having a smart heating system, using low-energy light bulbs and a slow cooker instead can all help.”
Secondly, it is important that early access to pay is explained properly to staff so they understand the true cost of any scheme they be offered. These types of schemes normally come with a charge, so while they can be helpful as a one off (eg for car repairs), they are not such a good idea if they become the norm as part of routine weekly or monthly spending.
Watts-Lay says: “Financial education and guidance delivered in the workplace can really help members understand these issues and should cover topics such as how to budget, tips for saving money, and debt management, as well as how the workplace benefits available can help.
“With the cost of living crisis hitting many hard, supporting employees to build their financial resilience and improve their financial wellbeing is of utmost importance right now.”
In partnership with WEALTH at work
WEALTH at work is a leading financial wellbeing and retirement specialist - helping those in the workplace to improve their financial future.