The UK is currently undergoing a severe cost of living crisis due to increasing energy bills, fuel costs, and grocery prices. Nearly 83 percent of adults have reported an increase in living expenses as of March 2022, up from 63 percent in November 2021, according to recent data from the Office for National Statistics (ONS). The situation is only expected to worsen, with a 26 percent electricity bill hike looming in October 2022.
The ongoing crisis is taking a significant toll on people, creating financial stress that leads to poor mental health. As an employer, it is crucial to support your employees during such a difficult time. One effective way to do this is by implementing employee benefits that enhance their financial and mental well-being.
This guide examines the different employee benefits that you can introduce to help your employees cope with the cost of living crisis.
Start a Discounts Platform
Employee discount schemes are a simple way to help your staff save money on daily costs. In the current economy, offering a scheme can go a long way in stretching an employee’s pay. Discounts can be offered on shopping, providing cash back on purchases from many stores, with discounts of up to 20 percent available.
According to Drewberry, a leading employee benefits consultancy, 40 percent of workers desire offers for rewards and gifts outside of work. By consulting with experts such as Drewberry, you can select the best employee benefits platform for your employees.
Increase Your Employees’ Pension Contributions
The Scottish Widows Retirement Report reveals that one in ten UK adults has either paused or is considering pausing their pension contributions because of the cost of living crisis. Although this might be a temporary solution, it will inevitably affect individuals’ retirement savings.
To prevent staff from opting out of pension schemes altogether, you could raise your employer contributions. Drewberry notes that 58 percent of employees wish for an increase in pension contributions from their employer. Offering increased contributions demonstrates your investment in their financial wellbeing, potentially encouraging staff to remain in schemes. This move can also boost employee engagement and productivity.
Provide Financial Wellbeing Services
Money can be a considerable source of stress and anxiety in these times of crisis. It is more important than ever to provide supportive employers and financial guidance to employees. Offering useful resources such as webinars can help educate staff on money management, including budgeting, saving, and financial products. For instance, tips on cutting energy consumption could also be included.
Introduce Salary Sacrifice Schemes
The cost of living crisis has made it more challenging for everyone to afford daily essentials. One way to help alleviate the financial strain on employees is through a salary sacrifice scheme, which offers non-cash benefits with lower Income Tax and National Insurance (NI) charges.
You could offer a cycle to work scheme, childcare vouchers, an electric car scheme, or a technology scheme. This allows employees to purchase a brand-new bike, car, or the latest technology at a lower cost since deductions occur before taxation, saving on Income Tax and NI payments.
Consider Earned Wage Access
Earned Wage Access is a payroll scheme that allows staff to access their wages before payday. It is a convenient option for those facing financial stress and difficulties. Using it prevents employees from resorting to high-interest payday loans when their finances run low. Unlike payday loans, this benefit carries no risk from high-interest payments.
However, the money they access gets deducted from their upcoming payday, necessitating financial education when introducing this benefit. Setting a cap on the amount accessible can prevent issues arising from overuse.
Offer a Health Cash Plan
A health cash plan is an affordable way to support your employees’ physical wellbeing. It’s simple to set up and comprehensive, offering staff access to a wide range of treatments. It can provide financial support for routine checkups, dental checkups, and unexpected medical expenses.
This employee benefit is particularly valuable during the cost of living crisis, where everyday health services such as dental and eye appointments can add up quickly. The option to reclaim these expenses from the plan can make a significant difference to a monthly budget.
The UK is currently experiencing a cost of living crisis, presenting significant challenges for employees. The financial stress resulting from the crisis can have severe implications when it comes to mental wellbeing. As an employer, there are various employee benefits available to support staff during the crisis. Including them demonstrates your commitment to their financial and mental wellbeing, improving engagement and productivity in the long run.
Consider implementing employee discount schemes, increasing pension contributions, providing financial wellbeing services, introducing salary sacrifice schemes, offering earned wage access, and including a health cash plan to lessen the financial burden on your employees. Consulting with experts like Drewberry can help select the best platform that suits your employee’s needs best.