UK employees are still continuing to feel the pinch, with the latest research from the ONS showing that the average UK employee is facing a real-time pay reduction 0.4% from August to October 2017 compared to the same period in 2016. The Joseph Rowntree Foundation has highlighted that this deficit could be even higher, as much as 1.4% for lower paid workers, such as those in hospitality or retail.
Although pay has risen by 2.5% in the 3 months ending in October compared to August to October 2016, the steady rise of inflation has consistently been above the rate of pay inflation; which has led to an eight month run of real-time wages falling for UK employees.
Faced with rises in food prices, living costs and interest rates (and the threat of further rises) people are feeling the pinch more and more. Particularly with most of the UK currently facing the cost of Christmas (ho, ho, oh-no). The TUC’s Secretary General, Frances O’Grady has claimed that “Working people will be worse off this Christmas than they were a decade ago.”
With this in mind, at Zest were questioning, what can employers do to relieve the pressure of the pay deficit? And more importantly, how can they help?
Everyone loves a voucher code, but waiting for one to come through into your email inbox is like a game of bingo, the numbers may never come at the right time.
Discount portals offer employers the opportunity to provide their people with discounts that impact on their everyday spending. From dining out and cinema trips to highstreet and supermarket discounts or even holiday discounts, employees could save upwards of £750 a year. Companies such as Sodexo offer discounts at six major supermarkets, over a hundred highstreet shops and more. Your people will love you for it.
Discount portals are a great tool to add to your arsenal. With low cost per head outlays, you could effectively be giving you employees a considerable ‘pay boost’ without the full on pay out.
Currently there is a selection of voluntary benefits that help both you and your employees make savings on Tax and National Insurance. These benefits include both cycle to work schemes and childcare vouchers*. They essentially reduce the cost of a purchase your employee is already going to make, by purchasing the vouchers through payroll before deductions are made. At Zest, we use Cycle Solutions, to source all of our cycling gear.
And, don’t forget, cycling to work will help reduce their commuting cost too. (You could have the next cycling legend in your midst…)
However, not all benefits are generating Tax and National Insurance savings. Voluntary benefits such as Private Medical Insurance, Travel Insurance, Dental Plans and more are now subject to Tax and National Insurance. But, you could still help your people save money on these benefits should they wish to use them. With the power of group purchasing you could help your employees’ access better rates then they could find on the market purchasing individually. There’s still money to be saved.
Financial wellbeing has been a hot topic throughout 2017 and is top of our recommendations. With the increasing pressures on your employees’ finances, many are facing higher levels of stress and anxiety on the money front. Employers now have the opportunity to become a key link for accessing financial wellbeing guidance, differentiating themselves as a forward-thinking employer.
Organisations such as Neyber , offer education and guidance on financial wellbeing for employees. From what mortgages are the best for each individual or how to save wisely for your future, right through to loan consolidation; organisations such as Neyber can arm your employees with vital information. This kind of guidance will empower your people to take control of their finances, reduce money worries and make their pennies work more in their favour. They could even be able to make up that 0.4%.
When selecting a partner for financial education consider how you would like to introduce the programme into your workplace. Some organisations will charge a ‘license fee’ for access to their information, other companies may offer the information for free in return for the use of some of their other services, such as loan consolidation.
So there’s our top 3 recommendations! If you have any recommendations why not share them in the comments!
*Please note that as of April 2017 employees will no longer be able to register for an employer based childcare voucher scheme, instead they will need to utilise the new government Tax-free Childcare programme. Keep an eye out for our guide to Childcare vouchers coming soon.
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