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5 innovative ways you can support your employees’ finances through the cost of living crisis

5 innovative ways you can support your employees’ finances through the cost of living crisis

Sep 29, 2022

2019 research by Close Brothers found that more than 9 in 10 (94%) UK employees suffered from money worries, with more than three-quarters (77%) of employees saying that money worries impact them at work.

Financial worries can have a detrimental impact on staff performance, leading to reduced productivity and, potentially, more absences due to stress and other mental health issues.

As an employer, there are lots of steps you can take to help support your employees’ financial wellbeing.

Indeed, a Partners& study recently revealed that one-third of the employers they questioned had already made, agreed to make, or are considering making financial support payments to staff to help alleviate their struggles.

Meanwhile, 1 in 4 employers said they offer some financial education services, with roughly 3 in 10 “actively considering” introducing a similar service this autumn.

It’s important to remember that supporting employees’ wellbeing is not just simply about “higher wages” – it’s about looking after their financial wellbeing.

The Money and Pensions Service defines financial wellbeing as: “Knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future. In short: feeling confident and empowered about your money.”

So, if you want to support your team during this difficult period, here are five practical ways you can do so.

Provide life insurance

Life insurance gives employees the peace of mind that their loved ones will receive financial support if the worst should happen. It’s a valuable part of financial wellbeing, as it helps tick the “deal with the unexpected” part of the definition.

As an employer, it is possible to set up a “group life insurance” arrangement – sometimes called “death in service” benefit – which will ensure the families of your employees receive a tax-free lump sum if a staff member dies while in your employment.

There are several benefits:

  • It’s a valuable employee benefit that can help you to attract and retain staff
  • Your employees benefit from the reassurance that their loved ones are protected
  • Premiums normally qualify as a business expense, meaning they are tax-deductible
  • Employees will typically be covered without medical underwriting
  • You can tailor different levels of cover to different team members – for example, you might offer higher cover to senior personnel.

Find out more about group life cover on our website, or chat to one of our experts for more help.

Provide income protection

In 2022/23, Statutory Sick Pay (SSP) in the UK is just £99.35 a week, payable for a maximum of 28 weeks.

This means that, if an employee is off sick for an extended period, their income could drop sharply. This may make it more difficult for them to pay bills and maintain their family’s standard of living.

If you want to support your employees if they are off sick, income protection can be a great choice. Group income protection provides an income to an employee if they are absent from work due to serious illness or injury. 

A key benefit of this type of protection is that it also provides rehabilitation support from the early stages of an employee’s absence. This can help to aid their recovery as quickly and effectively as possible. Your employee receives financial support and assistance, while you can get your valuable staff back to work sooner.

Group income protection benefits typically include:

  • You choose how quickly the cover kicks in. For example, if you pay 8 weeks full sick pay, you might want the cover to kick in after the 8 weeks has elapsed
  • You can choose what percentage of income to pay your employees if illness or injury prevents them from working for an extended period
  • Your team will have access to a team of rehabilitation and medical experts.                                                 

As with group life insurance, many providers have automatic acceptance limits below which underwriting won’t normally be required.

Offer access to financial education or a financial planner

Commenting on the survey reported earlier, Steve Herbert from Partners& said that, despite support towards household energy costs and a reversal of the National Insurance rise announced by the government, millions of working people are already in financial difficulties.

“This is primarily a problem for employees and their families, but it is also worth remembering that financially stressed employees are likely to be distracted and working at less than their maximum”, he said.

“Most employees in the UK have never benefited from any formal education around money matters […] it follows that most UK employees have no practical experience as to how to respond to this particular set of economic challenges.”

So, providing access to financial education or advice could be a great way to support your team. For example, you could partner with a local financial advisory service and offer their guidance to your employees at a discount.

Offer perks that can help

Another way you could help your employees is by creating a benefits package that makes their salaries go further every month. 

Examples of perks include:

  • Access to retail discounts
  • Employee rewards
  • Budgets for expenses like transport, childcare and healthy workplace lunches
  • Assistance paying off debt.

There are several employee benefits apps and packages that can help you put together the perfect solution for your business. 

For instance, apps like Perkbox offer more than 1,000 different perks and discounts on major brands, such as discounted cinema tickets and money off at a wide range of high street and online retailers.

Pay a fair salary

Simply, one of the best ways you can support employee financial wellbeing is by paying workers a fair wage. As well as alleviating financial stress and improving staff performance, a good salary also leads to happier, more motivated employees.

One way to ensure you pay your employees a fair wage is by regularly keeping up to date with the average salary ranges for different jobs. If you see that you’re paying your employees far below market rates, it’s time to give them a raise.

You could also consider joining more than 11,000 UK employers by paying the Real Living Wage rather than the minimum wage or national living wage.

As of September 2022, the Real Living Wage is £10.90 an hour in the UK, and £11.95 in London.

Also, as an employer you should always be mindful of expenses. Make sure you avoid employees paying for work-related costs such as transportation, meals, hotel stays, electronics, and office supplies. If employees do have to pay for any expenses up front, make sure you reimburse them quickly so they’re not out of pocket.

We can help you support your team’s financial wellbeing

If you’re thinking of putting some group protection in place as a perk for your employer, we can help.

As group life insurance, group income protection, and group Critical Illness cover experts, we can work with you to put the right package of benefits in place for your staff.

We work with dozens of the UK’s leading insurers and so we can find the most appropriate cover for your business, at the most competitive rate.

Find out more about group protection on our website, or get in touch with one of our experts if you have any questions.

 

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