Employees are being hit by a perfect storm of soaring energy and food prices, climbing interest rates and volatile investment markets, and many are struggling to make ends meet.
Furthermore, there is no immediate end to this trauma in sight, as there appears no obvious solution to the war in Ukraine.
So, not surprisingly, barely a client meeting currently goes by without Chase de Vere being consulted on how employees can be helped to navigate the cost-of-living crisis.
Whilst employers are frequently being asked for pay rises to help combat the highest levels of inflation experienced for 40 years, many feel they can’t afford to grant them, and so are keen to find other ways of making a difference.
Don’t overlook existing services
The good news is that they often already have services in their current employee benefit ranges that can save employees time and money, help them deal with financial stress and teach them new skills for managing their money.
So, the starting point for any employer is to conduct a benefits review to establish what ancillary services they have and to ensure these are being adequately promoted and utilised.
Many group risk providers, for example, now automatically include virtual GP services and mental health support, and their rehabilitation services will sometimes fund private operations to help employees return to work as soon as possible.
Additionally, employee assistance programmes (EAPs), which can help with debt management and financial stress, are commonly available either as add-ons to group risk or private medical insurance (PMI) schemes or on a stand-alone basis.
But usage of all these services is often well below what it should be because employees don’t understand what they can do to help them or even fail to realise they exist at all. So effective communication is essential, and Chase de Vere can help with this.
Some pension providers also offer scheme members free online lessons and tools that can help everyone from complete beginners to experienced savers take control of their finances and prepare for their future.
Those with a pension with Scottish Widows, for example, have access to its Be Money Well hub, offering bite-sized learning courses, tools, calculators, articles and videos.
The bite-sized learning modules cover everything from financial essentials, like budgeting and investing, to putting people in the best possible situation to deal with life events like marriage, redundancy and bereavement.
They also extend to showing employees how to get the most from their pension, whenever they’re starting – from pensions basics and whether they‘re on track to the options available at retirement and combining different pensions.
Our new module
Meanwhile, Chase de Vere added a cost-of-living module to its range of financial education services this November, and this has been proving extremely popular.
It covers issues like the importance of creating a budget and how to set about implementing it in practice, how to save money on household bills, and how to spot the signs of financial stress and effectively deal with them.
The vast majority of clients already using our financial education services have taken up this new module, and many others we’ve mentioned it to when carrying out pensions or salary exchange work have also wanted to add it onto the existing project.
Saving tax and NI
And, talking about salary exchange, if this isn’t an approach an employer is already using for pensions then it is certainly something that it should be seriously considering.
By employees agreeing to change the terms of their employment contract to reduce their entitlement to cash pay in return for enhanced pension contributions, salary exchange can unlock some very significant savings.
Employees can save on both Income Tax and NI, while employers can also save on NI. Furthermore, the employer can use their own NI savings to boost employee’s take home pay or pension contributions – or both.
So, some employers who thought they couldn’t afford to give employees a pay rise have found that they can simply as a result of introducing salary exchange.
If you would like to find out more about how Chase de Vere can help you to help your employees combat the cost-of-living crisis, then please don’t hesitate to contact your consultant.
Content is correct at the time of writing and is intended for general information only and should not be construed as advice.