By now, most people have felt the pinch of rising prices in some way. Fuel, food, electricity, and gas have all seen soaring price hikes in recent months – and it all adds up. What’s worse is that the cost of filling up a car by peak summer is expected to exceed £2 per litre for the first time ever. The Autumn is likely to see cost of living pressures increase, as massive additional increases to utility costs kick in.
Aside from whopping pay increases – which can challenge your budgets – here are a few ideas about the things that you can do as an employer to help your employees to improve their financial wellbeing in the midst of a cost of living crisis:
1) Financial Education and engagement
Would you be surprised if we said that the two main concerns facing your employees today are likely to be connected to their finances and mental health problems? And that these two topics can often be linked? There are clear links between financial wellbeing and employee wellbeing and performance, so providing financial education is number one on most HR teams’ priority list in terms of improving employee financial wellbeing.
A lot of people perceive financial matters such as budgeting, understanding financial products, and even just knowing where to start as really off-putting and complicated. In the UK, most of the workforce haven’t had access to financial education as part of the school curriculum, which is mad when you think about how much finances impact every part of our lives.
At Broadstone, we offer online financial education and engagement modules that can be applied in the workplace. Tools on our communications platforms can be discreetly accessed by staff, so they don’t need to worry about having to feel uncomfortable about seeking help.
The information provided in these modules can empower employees to make informed choices regarding financial issues, build their financial competence and confidence, or be signposted to other means of relevant help and support. Your employees’ ability to proactively address their money worries can be completely in their hands, all the while, being supported by you as their employer.
2) Free cashback and savings tools
This is – quite literally – free money! Many employee benefits platforms will offer a cashback platform. They are also easy to use; many having an app that you can download. Encouraging your staff to get into the habit of doing their normal online shopping through a cashback platform will mean free money in their bank accounts.
Ok, so it’s often a small percentage, but it all adds up – and it costs them nothing. Many cashback providers also allow users to top up their balance further by withdrawing it as vouchers instead of cash. Offering such a handy tool as an employer will show that you care and are trying to help staff through these tough times, by making their pay go just a little bit further.
3) Employee discount platforms
As well as helping financially, employee discount platforms are a good way to make your staff feel valued by you, their employer. From tech discounts and gym memberships to days out and restaurants – your platform can be built to suit you.
Broadstone can help you to set up, monitor and review a platform. This keeps it up to date, fit for purpose and helps it to develop as your business changes. Analytics and MI also provide meaningful data for HR to drive positive engagement and gain a deeper understanding of what their workforce values and appreciates.
4) Access to Workplace ISAs, and Debt Advice
Your employees may already have a well-established means of building up a rainy day fund – but many won’t. 1 in 10 people don’t have any rainy day savings at all, and a third of Brits have less than £600 in savings*. That means their financial resilience is very low, and they can get into difficulty very quickly when prices of everyday goods are rising, and their pay may not be keeping pace.
Providing access to a Workplace ISA can really support staff in establishing savings habits and is a very sensible element of an employer’s overall financial wellbeing strategy. This can also help improve your employees’ longer term financial outcomes by reducing the likelihood that older staff needing to access emergency funds turn to their pension plan as a solution – making their future retirement poorer and/or later.
When thinking about financial wellbeing benefits, the elephant in the room that is often overlooked is debt. Debt is one of the biggest barriers to short and long term saving, as well as taking a significant mental toll. In turn, this can impact upon their effectiveness and productivity at work. It isn’t always obvious who is struggling with debt either – recent research shows that higher earners have more debt than any other income group – and that they have more debt as a proportion of their income**. With interest rates on the up, employees with problem debt are likely to face bigger problems if they don’t have access to help. Workplace debt advice is becoming a very popular benefit for HR teams to add within their Employee Value Proposition.
Broadstone can help you formulate the right balance of financial education and financial wellbeing benefits for your staff. We can also design the right engagement plan to make sure staff understand and take advantage of the support on offer.
5) Saving for retirement and pensions
Many working people view retirement as something that is “a long way off”, and don’t necessarily always consider the consequences of not paying enough into their pension pot. The cost of living crisis can bring this into even sharper focus, with staff tempted to reduce contributions to pensions in order to free up money today. But with retirement lasting longer than ever, and therefore costing more than ever, gaps in saving created now can be highly detrimental to long term financial wellbeing.
We all know that providing a simple auto-enrolment pension is a legal requirement for everyone over the age of 22. However, employers now increasingly recognise that simply providing a pension scheme isn’t enough. Having the right communication and engagement plan, the right rules and options can make a world of difference to your employees. For example, through the current crisis, you might opt to maintain employer contributions for those staff needing to reduce employee contributions below your normal scheme minimums, creating less of a savings gap. If you aren’t already providing a salary sacrifice or salary exchange contribution option to staff, you might be missing out on employer NI savings, and making saving into pension more costly for your staff than it needs to be.
The minimum pension contribution levels laid down in law are themselves not likely to be sufficient to secure an adequate income in retirement, which is prompting many employers to look at pensions afresh to consider how to help staff address this challenge. In the future, this might be the difference between them being able to afford to retire at an appropriate point or being stuck in the workforce reluctantly due to affordability issues. Without active thought and employer support, under-saving into a pension could be a future cost of living in retirement crisis.
Providing financial education surrounding pensions allows your employees to fully understand the benefits of investing in their retirement from an earlier age, and of staying invested and reviewing savings levels throughout their working lives. This in turn has a significant impact on their long term financial wellbeing. Given that a pension is likely to be one of the biggest employee benefit spends for an employer, ensuring you are getting the most out of your benefit spend is critical to ensuring your overall employee value proposition is effective.
Whether you are just starting out on your employee benefits journey, you don’t know where to start or you just want to know what the best next step is for your business – Broadstone are here for you, so please get in touch for a no-obligation conversation.