Top 10 ways to help employees through the cost of living crisis
The cost of living crisis is affecting many people and 36% of UK adults say they are already cutting back on spending, according to a survey by financial wellbeing and retirement specialist WEALTH at work.
Pay rises are one option for helping people cope, but this is not always possible, and even if it is, companies are unlikely to be able to offer enough to keep up with rampant inflation. However, there are other ways workplaces are supporting their employees to improve their financial wellbeing.
1. Employee discount schemes
Some workplaces negotiate discounts on the things employees want and need to buy. For example, many offer retailer discounts, transport deals, gym memberships, discount on eating out and days out etc, but also better rates on mortgages and financial planning. Some even offer tech purchase schemes.
2. Employee assistance programmes (EAP)
Many workplaces offer an EAP to help employees deal with personal problems that might affect their work performance, health and wellbeing. An EAP can offer employees a wide range of support, including online resources, counselling, legal support and referral services, on what to do if they are struggling with their finances.
3. Debt support
Nearly one-quarter (23%) of UK adults say being in debt is one of their biggest financial concerns. Many companies offer financial education seminars on debt management to help employees understand how to manage and pay off debt, and the help available. Some companies also offer loan consolidation through payroll.
4. Salary sacrifice schemes
Salary sacrifice schemes allow employees to pay through company payroll to reduce their tax bill. It is common for pension contributions to be paid this way, but can also include company cars, bikes, bus passes and even mobile phones, gym passes and health and dental care.
5. Help employees to make the most of their savings
More than two-fifths (42%) of UK adults say that the increase in living costs has meant that they have reduced or stopped any regular savings. However, for those employees who can still afford to save, it is more important than ever that they make the most of these hard-earned savings. Savings and investment accounts offered in the workplace, including workplace ISAs, can provide a convenient way for people to save as deposits are often taken directly from salary making it habitual and effortless. These accounts may also offer discounted fees.
Many workplaces also offer the opportunity for employees to invest into shares in the company via a workplace share plan. Typically, these plans offer attractive tax savings or the option of buying shares at a fixed price later.
6. Promote pensions
Around 30% of UK adults say that they know that they should save more for retirement but it can be tempting to stop or reduce pension contributions when times are tough. In fact, according to new research, 7% of people plan to reduce their workplace pension contributions. However, a pension is one of the biggest workplace perks so it’s important that the benefits are well communicated to help employees avoid making decisions that they will likely regret.
7. Signpost external support services
Support tools are available online such as MoneyHelper’s budget planner. For those struggling to pay their bills, Citizens Advice can help them to work out what benefits or grants they may be eligible for such as the one-off payment of £650 to low-income households on means tested benefits such as universal credit, as well as the £400 energy bill discount due in October. Debt charities such as StepChange and National Debtline can help people to fix serious debt problems. Many energy suppliers offer grants to help customers in debt to them.
8. Communicate your benefits
No matter how good the financial wellbeing support you offer, if it is not well communicated and understood it’s likely that it will be overlooked by employees. So make sure they are aware of all the benefits you offer and that the information provided is up-to-date and relevant. Financial education is also essential to help employees fully understand their benefits.
9. Financial education programmes
Four-fifths (88%) of UK adults claim to know how much they spend on all of their essential bills (mortgage, rent, bills, food and energy) each month, yet only one-third (35%) actually keep a budget and know what they can spend, suggesting that in reality, many actually don’t know their outgoings.
Financial education and guidance in the workplace can make a huge difference, giving employees the opportunity to learn about budgeting, money saving tips, saving, debt management, and retirement planning etc. Many people discover really important lessons which make a big difference to their finances.
10. Remove the stigma
One of the main issues when dealing with debt or other money worries is talking about it. This may be because of the stigma surrounding debt and because people often feel ashamed of it. Our survey found that 14% of UK adults say financial worries makes them feel embarrassed. But the reality is that anyone could find themselves in this situation. Many proactive employers are encouraging their employees to not suffer in silence and access the support available to help.
Jonathan Watts-Lay, Director, WEALTH at work, says: “Nearly half of adults (47%) say that money worries affect their life, so it’s crucial that they get the support needed.
“We are seeing many leading employers integrating financial wellbeing strategies as part of their overall wellbeing objective which includes financial education and guidance to help employees understand their finances, including ways to save money, manage debt, how to boost savings and prepare for retirement.
“With the cost of living crisis hitting many hard, supporting employees to build their financial resilience and improve their financial wellbeing is especially important right now.”
The survey of 2,000 UK Adults was carried out for WEALTH at work by Opinium from 8 - 11 April 2022.
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.