How employee benefits can support employees with the cost of living
Employee benefits have always helped support the cost of living for employees in many ways, whether it be saving on the weekly shop with discounts or saving on the commute with various commuting benefits, for example.
But with the rising cost of living this focus has become even more important.
A strong, fair and well-rounded pay and compensation package is as important as ever as inflation rises in 2022.
The base of this package is fair and equal pay across the board in line with rising costs, but there are other areas which employee benefits can help address.
While fair pay helps employees’ incomings keep up with inflation at a minimum, employee benefits play their role in reducing outgoings, supporting employees with the foundation of their finances, helping build the right skills and protecting their financial future as well as the here and now.
With all this in mind, let’s dive into how employee benefits can really help.
Financial wellbeing
We’ve always maintained that providing a well-rounded, holistic financial wellbeing benefits provision has always been important for any business.
Building good finances requires a multi-faceted approach. It’s not all about living completely without life’s luxuries but building the right habits, recognising bad ones, solving short term financial problems, and building positive long-term financial behaviours.
So, how do employee benefits help?
Schemes like Financial Planning advice, Workplace ISA’s and a financial education library give employees plenty of options.
Expert advice goes a long way in both the short and long-term.
Workplace ISAs help provide alternative savings options through employees pay where high-street savings options more often than not provide little returns these days.
With rising inflation, what you do with your savings matters even more. Unfortunately, economic uncertainty and low savings interest rates from the banks don’t give you too many options.
But as mentioned, Workplace ISAs bring some much welcomed and needed options when it comes to saving wisely.
On-demand financial education through an employee benefits platform gives employees a library of information to turn to if they’re unsure on something.
It could be advice on how to reduce heating bills or how to finance for a big payment, 24/7 accessible advice can provide that extra helping hand that’s needed.
Discounts and lifestyle benefits
Lifestyle benefits aren’t just about saving on treats and days out, they can help save on many of life’s essentials even including the weekly or monthly shop.
The price of the average food shop has increased quite dramatically in many stores in 2022 with sharp rises in inflation.
The ONS estimates the average family spends £3,312 on the food shop each year.
In this scenario, just a 9% saving can total just under a £300 saving over the course of a year.
This is just one example of how employee discounts can help cut those outgoings.
Aside from the groceries, employee discounts help employees save in many areas of their life depending on the scheme your business provides and how wide-ranging it is.
MotorSave
The cost of running a petrol or diesel car can already be one of the biggest strains on our finances even without the increases in the price of fuel.
However, this represents an opportunity for an area where there’s lots of savings to be made.
With MotorSave, employees save up to 10% on car maintenance and can spread the cost through salary sacrifice. This includes things like tyre replacements, MOT and servicing.
According to research by Kwik Fit, the average motorist spends £350.64 per year on car maintenance, servicing and repairs.
A 12% saving here represents a £42.08 saving across the course of the year, paying just £25.71 per month.
What’s more is that paying monthly helps take the sting out of any unexpected payments.
Unexpected payments can often lead to people taking out credit to avoid going into an overdraft or to even make financing the payment possible, which often ends up costing more in the long run.
MotorSave helps employees keep car maintenance costs manageable and can provide some much-needed wiggle room in their bank account.
Car Benefit scheme
For employees that want to avoid fuel costs altogether, driving electric is an option.
However, it’s still considered pretty expensive for most despite its surging popularity.
With the Car Benefit scheme, even those who currently drive electric through a PCP or hire purchase for example can save driving electric.
The Car Benefit scheme often provides better savings on electric vehicles than on the high street due to low Benefit-in-Kind rates on ULEVs.
In many cases, the scheme is the cheapest way for employees to drive electric.
Plus, all the extras like maintenance and other running costs are taken care of and all the employee needs to do is top the car up with fuel or electric.
While the cost of energy is also rising and therefore the cost to top up an electric car, it’s still nowhere near that of filling up a petrol or diesel car.
For employees, using the scheme could also provide a short-term financial boost.
If they’ve got equity in their car or hire purchase agreement, trading in their car and driving electric through the Car Benefit scheme could provide some extra cash as a financial buffer against the rising cost of living.
Employers can also save up to £350 per employee through the scheme too.
Commuting Loan scheme
What about those employees who commute by public transport? This is where commuting loans come in.
Through the Commuting Loan scheme, employees can get an annual season pass and pay monthly through their salary, interest free with no credit checks, helping make an instant monthly saving on their commute.
The scheme can be used for rail, tram or bus travel for example and can even be used for parking.
Commuting Loans help instantly reduce monthly outgoings and make finances much more manageable.
We used National Rail’s season ticket calculator to see how much an employee travelling between Woking and London twice a week could save using the Commuting Loan scheme.
With a monthly pass, they’d pay £438.20 per month, adding up to £5,258.40 per year. An annual pass, however, costs £4564.
Using the Commuting Loan scheme, an employee in this scenario could save £694.40 per year or £57.80 per month on their commute.
Health and wellbeing
Good mental wellbeing is crucial to good financial wellbeing and vice-versa.
The two work in tandem and it’s important to stay on top of good mental wellbeing to make strong financial decisions, while reducing absenteeism which can ultimately impact finances.
A well-rounded health and wellbeing employee benefits provision that supports both physical and mental wellbeing provides a good level of support.
Employee benefits like the Health Cash Plan, PMI, Eyecare, Dental Cover and even the Gym Scheme are all designed to not only save employees money on healthcare but promote good health too.
So, if you’re looking to support employees with their finances it’s important to consider the bigger picture too.
The true value of employee benefits
In our savings examples, the employee who drives to work could save around £340 per year for their family just on the weekly or monthly shop and car maintenance.
The employee who commutes via train could save just under £1,000 per year just on their grocery shopping and commute.
For the employer, the savings extend way beyond the initial Tax and NI savings to be made through schemes such as MotorSave or the Car Benefit scheme.
Better financial wellbeing contributes towards higher productivity, reduced absenteeism and better overall performance and employee health and wellbeing.
The true cost benefits and ROI of employee benefits, particularly in this context in terms of how they support the cost of living, can never be overestimated.
For more, browse our wide range of employee benefits or get in touch today to see how these benefits could work for your business.
