The soaring cost of living will be affecting many employees in numerous ways and having a detrimental impact on their health and wellbeing. In fact, research has found that 72% of those seeking debt help say debt makes them ill(1) and 77% of employees say that money worries impact them at work(2). However, there are steps that employers can take to help employees make their money go further.
Debra Clark, head of specialist consulting at Towergate Health & Protection says: “There are options for employers to help employees with the cost of living that do not have to be expensive for the business, and some may even have no additional cost at all, but could prove hugely valuable for employees, such as salary sacrifice, budgeting advice, and employee discounts.”
Offering a salary sacrifice scheme enables employees to maximise their pre-tax income. Employees can pay a comparatively reduced price on things like childcare costs, commuting to and from work, and even their pension. If an employee is close to the higher rate income tax band, a voluntary increase in their monthly pension contribution could help them to stay within the 20% basic rate tax band.
Expert guidance is often more easily, and freely, available than people realise. In fact, it may already be provided as a cost-free add-on to other health and wellbeing support. Employee assistance programmes often form part of the offering within other employee benefits, such as group risk benefits, and can provide confidential advice to employees on a number of concerns, including money worries.
Employee discount schemes can help employees’ money to go further. Cashback cards can be made available for everything from the weekly grocery shop to clothes, DIY items, and days out. These come at a variety of costs, depending on the offer, or are sometimes even free to encourage store loyalty. Some employee discount schemes also provide access to a free credit-checking service, and money advice lines, to help employees to keep on top of their finances.
Added value benefits
Many health and wellbeing benefits now include additional benefits such as member discounts on a wide range of health and wellbeing related items, from discounted gym memberships, to free exercise trackers. It is always worth looking for added-value benefits like this as they are more common than many people realise.
Providing financial education through the workplace helps to give employees a greater understanding of their money and allows them to make more informed financial decisions. It makes sense to educate employees so they understand the value of the financial benefits that are offered by the company, such as pension contributions. Financial guidance can help employees to navigate debt, set household budgets, and to really take control of their money. Financial education may involve workshops or one-to-ones with a financial expert, or it may be as simple as making employees aware of comparison sites like MoneySuperMarket and Go Compare, to check they are getting the best deal.
For employees who are in debt, one option that can provide essential and cost-free assistance is to point them to debt-help charities. These include StepChange, MoneyHelper (formerly known as the Money Advice Service), and the Citizens Advice Bureau.
Debra Clark concludes: “Assisting employees with their money concerns, even in small ways, can help to alleviate the pressures they are under and can improve health and wellbeing. The less financial stress employees are under, the more productive they will be, and, in our experience, employees place a huge value on employers that proactively support such an important area.”
1. The MoneySavingExpert.com guide to mental health and debt
2. 25 million UK employees affected by money worries while at work | Close Brothers Asset Management (closebrothersam.com)