This week we learned that insolvency rates are on the rise for the first time since 2009[i], with the number of 18-34 year olds declaring themselves insolvent increasing by one third. With wage growth lagging behind inflation, cost of living is on the rise and young people in particular will be feeling the pinch.
These findings from the Insolvency Service come on the back of a worrying trend. In August 2016, the Money Advice Trust’s report Borrowed Years[ii] found “1.8m young people under 25 [were] falling into difficulty as they take their first steps into adult life.” This had knock-on effects for health and well-being with 51% saying they regularly worried about money and around a fifth reporting their money worries kept them awake at night. The stress this can cause shouldn’t be underestimated. In fact financial worries came top of the list in Neyber’s report into Financial Wellbeing last month[iii].
Against this gloomy backdrop there are positive steps employers can take to encourage staff to face their financial difficulties head on and improve their situations. Ian Jenkins, Director of Richmond House Corporate Services argues that financial advice and education must be part of a company’s health and well-being policy. ‘We work with our clients to offer financial advice, not only at a business level, but for every employee on their payroll. We hold surgeries on their premises and encourage staff to come and talk to us openly about their finances. We can give them independent advice and recommend the best solutions for their particular situations. Time is precious, so if we can come and offer this service in the workplace, employees are more likely to get the assistance they need. Our on-line service also provides employees with a knowledge-centre, where they can access the latest information on financial news, policies, products and services.’
Better financial education is just what people need. In a report released by the FCA this week[iv], younger people are least confident and knowledgeable when it comes to managing their money. Thirteen per cent of 25-34 year olds have missed paying domestic bills or credit payments in three or more of the last six months. When asked how they would describe their financial situation, 13% of 25-34 year olds said they were ‘in difficulty’ and 36% said they were ‘surviving’. At a life-stage where people might be starting a family, trying to get on the first rung of the property ladder, saving for a holiday or repaying a student loan, the financial demands on younger people are high.
Again, employers can step in here and make a difference. An employee benefits programme is a great way of helping staff to pay for life’s essentials at a reduced rate. Grocery bills, childcare costs, birthday presents, a new car, even training and development can be funded through a benefits scheme which allows employees to make tax-saving efficiencies. Ian Jenkins is raising awareness amongst small and medium-sized organisations who might not typically offer these services. ‘At Richmond House Corporate Services, our extended offering means that firms can offer their employees an innovative benefits package with a range and breadth of services to rival those provided by much larger employers.’ And with links to increased employee engagement and retention the pay-back for employers is clear.
For more information on Richmond House Corporate Services please contact 0333 241 3350 or email firstname.lastname@example.org
[iii] ‘The DNA of Financial Wellbeing 2017’, www.neyber.co.uk
‘[iv] Understanding the Financial Lives of UK Adults: Findings from the FCA’s Financial Lives Survey 2017’ www.fca.org.uk