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AuthorDavid Pinner Employee Benefits Consultant Johnson Fleming (an NFP Company) |
It was widely reported in the media recently that people under 30 in the UK are facing a ‘cost of renting crisis’, with figures showing that 40% of this age group are spending an unaffordable 30%+ of their income on rent (Dataloft, Aug, 2022). According to a survey of 150,000 young people, under-30s spend a larger proportion of their income on rent than any other working age group.
The rental crisis for under-30s comes with an extra blow – inflation has also hit a 40-year high, and energy and food bills are rising rapidly. With lower income households spending a larger proportion on these essentials (Commons Library Research Briefing, Aug 2022), your younger employees are likely to be hit the hardest.
Here are a few tips on what employers can do to suppocrt this workforce demographic, and ensure that they remain productive under these worrying circumstances:
1. Discount portals
These are relatively inexpensive employee benefits to set up. Discount portals are websites and apps where employees stretch their salary further by saving money on everything from daily essentials to white goods and technology. .
2. Cash plans
Employees can claim money back towards the cost of essential and routine medical care such as optical, dental and therapies. It supports your people’s health and productivity, and helps them avoid being hit with big bills for routine care.
3. Salary sacrifice
There are still a handful of areas where this can be accessed such as pensions, Cycle to Work, and leasing low-emission vehicles. Every workplace has a pension scheme, and converting to salary sacrifice means that employees can achieve the same pension contributions but with higher take home pay.
With private car ownership reducing by 9% between 2013 and 2021 (Fleetnews, Nov 2021), following the increasing popularity of leasing, employees can potentially get better value by participating in a lease scheme funded by salary sacrifice. It also gives some cost stability, as insurance and maintenance can be included in the monthly payment.
4. Financial wellbeing education
Financial basics such as how to budget, using credit wisely, and how to obtain a mortgage, were probably not featured on your people’s school curriculum. But, this education can be supplied in the workplace, through interactive webinars and information portals - giving employees the building blocks to change their situation for the better, and become more financially resilient.
5. Saving for a deposit
This can be made easy for employees by giving access to a savings platform and facilitating deductions from salary; helping to build up financial resilience, establish good habits, and put people on a pathway away from renting and into home ownership.
How can we help
A few low-cost adjustments to your employee benefits offering can have a really tangible positive effect on younger employees, and show how as an employer you are specifically supporting their needs in a tough financial environment.
If you’d like to find out more about how to better support your people through the cost of living crisis, get in touch with David at david.pinner@johnsonfleming.com