Helping employees to stretch their pay further.

Q: What financial education programmes and support can employers offer to help employees make the most of their pay packets? Also, what budget planning and debt management support could help staff?

Jonathan Watts-Lay, Director, WEALTH at work, comments;

“Many employees would benefit from having a better understanding of money, but are confused where to start. Too many struggle to pay bills, or repay expensive debt. Often people have direct debits for products and services they no longer use, or fail to shop around when buying expensive services such as car or household insurance.

Whilst employers may provide some support to help employees manage their money, for example via a website, this is often far too passive and actually having someone to speak to about their finances is far more engaging. In fact, some of the UK’s leading employers are using either virtual or face-to-face seminars to help their employees understand key financial issues such as budget planning and debt management. Getting employees to think about how they spend money on everyday items such as utility bills is essential, particularly given the ‘cost of living crisis’ of which energy costs are a big part.

Another important principle is helping employees understand the difference between good debt and bad debt. For example, a mortgage is a form of good debt – it makes sense to have a loan in order to own your home as it is a stable, easy to manage approach to long-term borrowing. However, it should still be reviewed occasionally to ensure you have a good deal. At the opposite end of the spectrum, debt with high interest payments such as ‘buy now pay later’ loans and credit cards can get out of control if they are not repaid quickly.

A number of other methods are also available to support staff depending on their preferred learning style and work environment. This could include interactive tools, videos and animations, or even an online ‘Financial Healthcheck’ offering support on areas such as how to manage the monthly budget and what to do if in debt.

Additionally, one-to-one guidance or financial coaching sessions could be delivered via a video call or via the telephone. This is particularly useful for those who need more support and to gain a deeper level of knowledge around their finances.”