Helping Employees Manage the Cost-of-Living Crisis

The current cost-of-living crisis continues to place a significant strain on employers and employees alike with little sign of easing in the short term.

As an employer, I am sure you wish to support your employees in this difficult time, however, very few companies can afford to help in the form of a double-digit pay increases or one-off cash payments.  However, there are alternative options available that employers can utilise to empower and support their staff:

Providing your employees with education and guidance on how to manage their financial affairs is a quick and effective way of supporting them.  By helping individuals learn how to budget effectively, review all expenditure and financial commitments, it may be possible for your employees to reduce their spending and increase disposable income, in order to help with the increased price of goods and services.

The Bank of England have increased interest rates in recent months and are expected to continue to do so, with the aim of bringing inflation under control.  This potentially adds hundreds of pounds to a household mortgage each month at a very unwelcome time.  With the support of a mortgage specialist, individuals may be able to secure a better interest rate on their existing mortgage to help control the monthly repayments.

Likewise, 2022 has seen severe volatility in investment markets which are likely to have had an adverse impact on savings and investments.  By seeking the advice of an Independent Financial Adviser, individuals can receive professional advice to help manage their finances through the choppy waters ahead.

As an employer, you are likely to have a workplace pension scheme to comply with automatic enrolment. Did you know that a workplace scheme can be set up in a very tax-efficient manner so that both the company and employees can potentially save National Insurance Contributions (NIC) on employee payments?

This is known as salary exchange – or salary sacrifice – and, when participating, employees save NIC on their payments, therefore, reducing the cost of paying into the pension.  Employers also save employer NIC, which then creates savings for the business as well. This can then be retained or reinvested for the employee’s benefit, for example, you could pay this into their pension or offer alternative benefits to help with employee recruitment and retention.

For more information on supporting your business and employees with the cost-of-living crisis, please do not hesitate to get in touch with Senior Corporate IFA Consultant, Craig Pritchard Dip PFS, on 0117 450 1300.