Posted on: Wednesday December 09, 2020
The typical UK household spends an extra £800 in December, mainly on food, alcohol and presents. That’s a lot of extra costs to absorb from December’s pay packet, so many end up paying well into the new year.
What’s more, this Christmas follows months of the COVID-19 crisis putting extra pressure on employees’ finances. Employees may be at risk of overstretching themselves, with a knock-on impact to their mental health, and ultimately their performance at work.
Employers can help by providing financial wellbeing benefits that enable staff to make the most of their money. Here are three of the best:
Available from a wide range of major retailers, these enable employees to save money on everything from grocery shopping to luxury brands. Many are available as e-vouchers on mobile phones, making it quick and easy to save while you shop.
This gives employees access to new technology via a salary sacrifice scheme. Staff can own the latest home technology like iPads, smart TVs and fitness trackers with convenient, affordable payments, as well as saving on National Insurance contributions.
Spreading the cost over 12, 24 or 36 months means it’s a more reasonable way to make a large purchase for the employee or their family. And the fact that there’s no upfront costs, credit checks or deposits makes it accessible to people who might otherwise miss out.
Employers set a maximum value of products per person so employees aren’t at risk of overstretching themselves. By helping employees to take home exciting technology with no financial hassle and no waiting, you’re providing enjoyment – but in a financially responsible way.
Wage streaming / flexible pay
This gives employees access to a portion of their wages as soon as they have worked the hours, rather than waiting until the end of the monthly pay cycle. The idea is to alleviate cash flow problems along with the resultant financial stress and potential for going into debt. For example, for many people having to meet an unexpected expense mid-month could mean resorting to a payday lender with sky-high interest rates.
Accessing wages before payday gives employees a higher sense of control over their cash flow and budgets. As an employer, you set a limit on how much of their pay packet staff can stream per month – usually this is around 30%-40%.
For employees who want greater financial flexibility, wage streaming is a handy way to access funds without borrowing. Other workplace lending schemes rely on credit checks, and those who need it most may not be eligible.
This benefit works well for employers with shift workers. Providers also offer fintech-enabled features like wage tracking (visibility of earnings in real time) and gamified savings accounts to encourage financial resilience.
Christmas can be an expensive time of year, but financial wellbeing benefits can help employees spend sensibly after a difficult year, the best gift of all may be just spending time with our loved ones.
To find out more about how to support employees’ financial wellbeing, download our report here.