Reward news
Financial worries report ACCORDING TO the third annual DNA of Financial Wellbeing report (http://bit.ly/35O9Ivr), published in 2019 by Neyber, a financial wellbeing provider, three in five individuals are feeling financial strain and they’re also worrying about their later life and retirement. It’s not just the lower-paid, as those with the highest salaries are worrying too (see chart). The research, which looked into money behaviours and attitudes of over 11,000 employees and 720 employers, shows many employees are struggling just to get by from payday to payday. To make ends meet: ● 27% use credit cards to get by, building on the issue regularly, and ● just 2% borrow from their employer, perhaps through a loan or payroll lending. Monica Kalia, chief strategy officer and co-founder of Neyber, said: “Across the UK, an estimated 20.3 million workers are affected by money worries. “Providing support that is relevant to the differing needs of employees is an important part of an employer’s support. Financial wellbeing is not just about paying off debt, but about ensuring employees feel in control and confident about their future as well.”
% of people in each income group who say they are affected by money worries
100% 80% 60% 40% 20% 0%
70%
66%
65%
62%
58%
47%
48%
46%
Less than 10k
£10-19k £20-29k £30-39k £40-49k £50-59k £60-69k £70k+
Workplace saving trials NEW RESEARCH being funded by the Money and Pensions Service will test how saving through a workplace payroll scheme can help people improve their financial wellbeing, and ultimately encourage more employers across the UK to offer similar initiatives. The trials will examine for the first time how workers could benefit from being able to save or repay affordable loans through automated deductions from their salary with a credit union. The two studies are being run by the Financial Inclusion Centre and tested amongst the workforces of Leeds City Council (‘the Council’) and York Teaching Hospital NHS Foundation Trust (‘the Trust’). Both offer payroll savings schemes through Leeds Credit Union. The first study will be carried out at the Trust and will involve an internal campaign promoting payroll saving to colleagues, establishing payroll saving as a ‘social norm’ using staff case studies to influence others. The second study, across the Council workforce, will test the incentives of one-off cash prize draws to encourage staff to join the credit union and set up monthly payroll saving. Another prize draw will be run for those who maintain the saving habit over six months. The results of the trials will be used to provide employers across the UK with practical tools and promotional materials to encourage staff to save via automated payroll deduction. Initial report findings (http://bit.ly/3a9psfJ) suggest that those who save with a credit union through payroll are directly benefiting from such schemes: ● three quarters (78%) of those who save with a credit union through payroll deductions are far more likely to save regularly compared to just over half (55%) of non-payroll savers who are with a credit union, and just under half of staff (47%) who are not members of a credit union at all ● almost all payroll savers (96%) would recommend this type of scheme to their co-workers, and said ease and simplicity of this type of saving (79%) is the biggest draw ● almost two thirds (62%) of those not already saving via payroll deductions were unaware that they could save in this way. Michael Royce, senior policy and propositions manager at the Money and Pensions Service, commented: “An increasing number of employers are recognising the need to address money worries amongst their workforces, with research showing 22% noted productivity was reduced due to money-related stress. We hope these trials bring to light the important role employers have to play in improving the financial wellbeing of their staff, and will move them to offer similar payroll saving schemes.” Chris Smyth, chief executive of Leeds Credit Union, said: “At Leeds Credit Union we work with a range of employers to provide them with an effective free payroll scheme they can offer to their employees. We have found it produces benefits to both the employer through reduced stress and anxiety in the workplace and of course to their employees who benefit from easy access to saving accounts and affordable credit, allowing them to plan for any unexpected outgoings.” For information on how employers can get involved in payroll saving schemes with a credit union visit http://worknotworry.org/ . The early-May bank holiday Note that the first of the two bank holidays in May 2019 has been moved from Monday 4 May to Friday 8 May to commemorate VE (victory in Europe) day 1945 (http://bit.ly/2tVULtS).
| Professional in Payroll, Pensions and Reward | February 2020 | Issue 57 30
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