With inflation forecasted to reach 15% by the end of 2022 and energy prices continuing to rise in the run up to winter, households across the UK are under huge pressure to meet their financial commitments. With a 3% fall in the value of wages, many people are finding it difficult to pay for the essentials and we’re faced with the phenomena of ‘heat versus eat.’ This is where, of the 4 million homes in the UK that are already in fuel poverty, people are having to make the choice between putting food on the table or heating their homes.
Step Change is Debt Charity that helps families by offering free, impartial debt advice and support. The charity tries to help individuals build better financial resilience, but in these times of serious hardship, they are fighting an uphill battle. They say that not only does problem debt and financial stress have an impact on workplace productivity, but it also has a direct effect on both the NHS and the housing budget.
Financial stress has a direct impact on absenteeism in the workplace, leading to lost productivity for employers. HR News reported in 2019 money worries were costing the UK economy upwards of £50 billion a year in lost productivity. This was the equivalent to between 13% and 17% of employers’ payroll costs. These are pre-pandemic and the energy crisis figures, money worries have increased dramatically since 2019.
In September 2021, the Government launched a £500 million support package for vulnerable households over winter. Those households were able to access the support fund to help them with essentials such as food, clothing and utilities over the winter months.
With the energy price cap being lifted and a huge rise in inflation during 2022, the Government have now launched a campaign called ‘Help for Households.’ This is a series of measures, including discounts, offers and access to benefits, to support the most vulnerable in the UK with cost-of-living support. The Government has allocated £37 billion in additional funding to address the most pressing needs.
Not only does Help for Households signpost visitors towards benefits that may be available to them, it also provides information on the cost of living support initiatives that have been introduced for those that are eligible. Eligible groups include those with disabilities, pensioners and those on Universal Credit.
The website also provides guidance on ways to save energy in the home, how to access grants for improvements and what the different payments are and when households will start to receive them and how.
Businesses in the UK are also stepping up to support the most vulnerable. Some of the UK’s large food retailers, including Asda, Sainsbury’s, Morrisons and Iceland have launched cost saving initiatives for their customers.
Asda, recognising the importance of tackling school holiday hunger through the summer, have extended their Kids Eat for £1 initiative to feed children at any time of the day in Asda cafés until the end of 2022. There's no minimum adult spend, meaning that kids under 16 can get a meal for just £1. Baby food is also included in the offer and Asda are supplying a free pouch of Ella’s Kitchen baby food in the cafés until the end of the year.
Another food retailer, Sainsbury’s, has introduced recipes for budget-friendly meals, where a family of four can eat for less than £5.
Schoolwear, which is a major expense at this time of year has had prices frozen in retailers such as M&S. Shoezone are offering up to 50% off selected styles of school shoes to try and ease some of the financial burden.
The website also signposts visitors to subsidised travel for recipients of Universal Credit as well as discounted utilities.
Support for the Help for Households initiative is voluntary for businesses. They can sign up to offer discounts and support as part of the campaign.
How does PayCaptain help?
“Financial stress is a very real issue for employees in these really tough times,” says Simon Bocca, founder of PayCaptain. “This has a huge impact, not only on employees, but on employers too. It’s in everyone’s interest to offer solutions to support employees to improve their financial well-being. We have built a solution to help employees manage their money better, access emergency funding when needed but protect their pay to make sure that important bills are still paid.”
PayCaptain is a payroll solution that has been designed and built to provide payroll services to all employees. It does, however, have some specific functionality that’s included in the solution to help those who are on lower incomes or vulnerable financially during these challenging times. This functionality helps them to manage their money better and try to build some financial resilience for the future:
- On demand pay – where companies can give their employees access to payments when they need them, even if it’s outside of the regular pay period
- Payment splitting – where employees can make payments direct from their net pay to family members, landlords, loans, credit cards, etc – eliminating risk of missing an important payment
- Interactive payslips – these are graphical payslips which break down payments and deductions for employees. Employees can click on Help icons for more information on how their deductions have been calculated so they know exactly how their pay has been worked out. Help icons explain tax, NI, student loan and pension calculations directly on the payslip
- Savings - employees can pre-plan the amount to save and is automatically transferred from net pay. This builds some resilience for times of financial hardship
- Money planning tool – where employees can create a personal budget
- Personalised financial guidance – trusted, impartial and confidential financial guidance from Money Helper can be accessed directly through the PayCaptain app
- PayCaptain has an AI Chatbot that can answer the most frequently asked questions raised by employees about their pay. If the employee needs to speak to an expert, they can be transferred to a member of the PayCaptain team for more guidance and support
- Pensions – to make provision and build better financial resilience for later life
In summary, with the increase in the cost of living and the energy price cap being lifted, employees are facing significant struggles financially. Help for Households offers some support for residents of the UK in terms of discounts, access to financial support and debt management.
This initiative can be part of an overall attempt to improve employees’ financial well-being. When employees are struggling with financial stress, there is a huge impact on both employee and employer. There is a costly financial implication to businesses in both absenteeism and presenteeism, which can be addressed by offering solutions and support to employees to improve their financial resilience.
To learn more about how PayCaptain can help your business and improve the financial well-being of your employees, please contact us for an informal, no-obligation chat. We’ll be happy to demo PayCaptain for you.
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