Top 10 ways your work could help you through the cost of living crisis
The cost of living crisis is affecting many people. 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.
WEALTH at work, a leading financial wellbeing and retirement specialist, outlines below some of the ways your work could help you through the cost of living crisis and protect your savings.
1. Company discounts
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. Increase frequency of salary payments
As prices increase, the number of people struggling to make it to payday, before running out of money, is likely to grow. In fact, 36% of UK adults say they are already cutting back on what they spend due to the increases in the cost of living.* Some workplaces are looking at ways to be able to pay their employees the wages they have already earned before payday and others offer to pay in advance. This could be useful in an emergency such as urgent car repairs, but this may not be the best option for those who are continuously finding themselves overspending each month.
3. 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. However, this benefit is often overlooked. 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.
4. Debt support and loan consolidation
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.
5. Salary sacrifice
One way to save money is by paying for things through your company payroll, so the amount you pay tax on is reduced. This is known as salary sacrifice. It is very common to pay for pension contributions this way, but it can also be used to pay for transport such as company cars, bikes, and bus passes, and even mobile phones, gym passes and health and dental care.
6. 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 who can still afford to save, it is more important than ever to 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 to invest into shares in the company via a workplace share plan. Typically, these plans either offer attractive tax savings, or offer employees the option of buying shares at a fixed price in the future.
7. 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 your 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, this is something which you will likely regret later on in life. Many employers will match not only the pension contributions made through auto enrolment, but additional contributions as well. This means that your savings will automatically double, as well as the savings on National Insurance and tax.
8. Hybrid working
Some employers have introduced hybrid working to encourage employees to work in a way which suits them. For example, some people are concerned about the cost of heating their home and are wanting to work in the office more often, whilst others are more concerned about the cost of the commute and would like to work remotely for a while.
9. Financial education
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, retirement planning etc. If your employer is offering financial education, don’t think it is too late to make a difference, many people discover really important lessons which make a big difference to their finances.
10. Removing 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 employers 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. Many workplaces provide financial education and guidance for their employees to help them understand their finances including ways to save money, manage debt, how to boost savings and prepare for retirement. This is especially useful right now.”
Watts-Lay concludes; “If you are struggling with your finances, please do speak to your employer to find out what help they have available. Even if they don’t offer anything at the moment, sharing the challenges you are facing may encourage them to put support in place.”
*The survey of 2,000 UK Adults was carried out for WEALTH at work by Opinium from 8 – 11 April 2022.