The cost of living crisis is affecting many people and 36% of UK adults say they are already cutting back on what they spend.* Pay rises are one option to help people cope, but this is not always possible, and even if it is, companies are unlikely to be able to keep up with rampant inflation. However, there are many other ways workplaces are supporting their workforce to improve the way they manage their money to improve their financial wellbeing.

Here are some of the ways to help your employees through the cost of living crisis and protect their savings*.

1. Consider employee discount schemes
Some workplaces negotiate discounts to save their employees money on the things they want and need to buy.  These can really make a difference now that people are seeing increased pressure on their finances. For example, many offer retailer discounts, transport deals, company 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, where spending on tech can be paid off over time.

2. Offer an Employee Assistance Programmes
Many workplaces offer an Employee Assistance Programme (EAP) to help employees deal with personal problems that might impact 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. Provide debt support
Nearly a quarter (23%) of UK adults say that 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 what help is available. Some companies now also offer loan consolidation through payroll, to support those who need help paying off their debts.

4. Introduce salary sacrifice schemes
Salary sacrifice schemes that allow employees to pay for things through their company payroll to reduce the amount of tax paid can help them to save money. It is very common for pension contributions to be paid this way, but can also include payments for transport such as company cars, bikes, and bus passes, and even mobile phones, gym passes and health and dental care.

5. Help employees to make the most of their savings
Over two fifths (42%) of UK adults say that the increase in the cost of living 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.  In addition, 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 including Save As You Earn schemes and Share Incentive Plans.  Typically, these plans either offer attractive tax savings, or offer employees the option of buying shares at a fixed price in the future.

6. Promote pensions
30% of UK adults say that they know that they should be saving 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 to keep up with the increased cost of living. However, a pension is one of the biggest workplace perks so it’s important that the benefits of them are well communicated to help employees avoid making decisions that they will likely regret later on in life.

7. Signpost external support services
There are many support services available to make employees aware of. For example, budgeting 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 bills discount due in October. If debt is something that employees are worrying about there are many debt charities out there such as StepChange and National Debtline, who can help people to fix serious debt problems. Or if employees are in debt to their energy supplier, many of them are offering grants to help.

8. Communicate your benefits
No matter how good the financial wellbeing support is that you have in place, if it is not well communicated and understood then it’s likely that it will be overlooked by employees.  So making sure employees are aware of all the benefits you offer, and that the information provided is up-to-date and relevant is key. Financial education is also essential to help employees fully understand their benefits.

9. Introduce financial education programmes
Four fifths (88%) of UK adults say they know the amount of money they spend on all of their essential bills (mortgage, rent, bills, food and energy) each month, yet only a third (35%) actually keep a budget and know what they can spend each month suggesting that in reality, many actually aren’t aware of how much they spend.*

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 people often feel ashamed about it. In fact, our survey found that 14% of UK adults say that financial worries makes them feel embarrassed, rising to 23% of 18 – 34 year olds.* The reality is, a change in circumstance could mean 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, comments; ”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.

** Barnett Waddingham https://ifamagazine.com/article/more-than-a-million-people-plan-to-reduce-their-workplace-pension-contributions-to-tackle-the-cost-of-living-crisis-barnett-waddingham/