Financial Advice

Help your workforce manage debt

With a pattern of low savings rates and rising debt levels - what can employers do to help employees struggling with their personal finances?


In the UK, average household debt currently stands at £58,948*.  There has also been an increase in average total debt per adult of £898.71* in the year to November 2018.  

It looks like things are forecast to get worse, as according to the Office for Budget Responsibility’s forecast, household debt is predicted to reach £2.258* trillion in Q1 2022.  

There isn’t much better news for savers either, as the average cash ISA rate in November 2018 stood at just 0.88*%, in contrast to the average credit card interest rate which is 18.69*%. 

Debt isn’t just a finance issue as it feeds into all elements of a person’s life. Most people will be embarrassed by their debt problems and will tend to hide it from their employer and colleagues.

You may wrongly assume that it is just people on benefits or low incomes that struggle with debt. Research carried out by Neyber** found that 50% of workers in the UK are borrowing money regularly to make ends meet. 

Debt problems often lead to metal health issues, stress and depression which could have a detrimental affect on your workforce (especially if you do have 50% with money issues)! 

It’s not all doom and gloom though as there are things you, as an employer, can do to help:

Financial education

Financial education is a great way of helping all of your employees with their personal finances.  The way we do it at Lemonade is by segmenting your workforce by life stage, as they have different needs and priorities - find out more.

Promote EAP

Don’t forget to promote your Employee Assistance Programme! It’s there to help counsel your employees with practical advice on issues such as debt that may impact their performance at work.

Workplace loans

If you don’t already, you could look into offering workplace loans which allows employees to pay back the loan from their salary.  There are a number of providers offering a ready made solution such as; Neyber, Workplace Finance and Salary Finance for loans as low as 4.9%***. 

This helps simplify monthly budgeting for your employees, with the loan repaid from net salary**** before they receive it. This could prevent employees using payday loans, other high interest borrowing vehicles or act as a means of them repaying high interest debt. 

***On loans between £300-£5,000 over 1-5 years

****Net salary deduction, therefore no income tax or NI saving

Reducing travel expenses

You can help your employees to reduce their travel expenses by offering season ticket loans or cycle to work schemes.  It’s also a good idea to encourage a car sharing scheme - not only is this good for money saving, it is also environmentally friendly!

Retail / eating out discounts

There are many discount card schemes available through employee benefits to save money on eating out and shopping.  Encourage your employees to sign up to these cards so they can reap the rewards.

Promote childcare savings

For many, their childcare bill is almost the same size as their rent or mortgage! Make sure your employees are aware of the tax free childcare scheme from the Government which gives parents £2 for every £8 they put into their childcare account - up to £2,000 per year.  

Review their existing spending

Encourage your employees to complete a budget planner, like this one - Budget Planner.  

You could do a internal campaign to get your employees thinking about little switches they could make that would save them money such as:

  • Utility Bills / insurances - using comparison sites to get the best deal

  • Mortgage rate - when was this last reviewed? Fixed/Variable? Compare the market 

  • Supermarkets - could they save money by switching to Aldi or Lidl? 

Communication 

It’s great to have a good benefits package which includes help and advice for money worries, but if you aren’t telling your employees about it on a regular basis then it isn’t doing its job.  

Make sure you put a communications strategy in place to ensure your employees are engaged with their benefits package.  We have just launched a handy guide to creating your Employee Benefits Communications Strategy which you can download here.  

* https://themoneycharity.org.uk/money-statistics/

**DNA of financial wellbeing research - Neyber

Our new Informed Pensions brand

Lemonade launches DB member options service for schemes

In the news! Our new Informed Pensions brand has been featured by Professional Pensions! You can see the article HERE.

We have just launched a new brand, Informed Pensions, to focus on the bulk DB member options market.

Informed Pensions aims to make retirement better through a unique combination of technology, advisers and great communications.  This provides a range of tools to help DB pension members fully understand the options available to them.

Our ethos of ‘simplicity and clarity’ runs through the work that Informed Pensions carries out, ensuring members understand the bigger picture when making important decisions about their retirement. 

Lemonade listened to market feedback in order to shape the look and feel of the new Informed Pensions brand to ensure it resonates with members of retirement age.

Working with employers and trustees to help DB members through their options at retirement, Informed Pensions offers impartial advice through a simple 3-step process. This ensures members get the appropriate advice as well as reducing risk for the sponsor.

David Pugh, Managing Partner, Informed Pensions said: 

“Our new brand has already helped deliver a number of significant new projects. Working with most of the big pension consultancies has given us the opportunity to create this new approach and better engage the target audience.”

You can contact Informed Pensions through their new website > www.informedpensions.co.uk

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Financial Wellbeing - Intrusive or valuable?

Recent research* has found that 45% of employers believe they are intruding into their employees lives by offering financial wellbeing. Eight out of 10 said they don’t know the difference between financial advice and financial guidance.  


There is still some scepticism around financial wellbeing and whether employees’ financial problems can be patched up with a ‘shiny wellness package’.  


If you segment your audience effectively to ensure you are talking to your employees about topics relevant to them you can successfully inspire them to take action to improve their finances.  


It is also important to give them time out of their busy lives to sit down and really consider their future financial plans as most people very rarely get this opportunity.  


To help demystify this differences between ‘financial guidance’ and ‘financial advice’ have a look at the cards below which shows what ‘financial guidance’ might cover verses what you could have a 1-1 advice meeting for.

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Essentially, you would require ‘financial advice’ if you need/want a specific recommendation from a qualified advisor.  A financial wellbeing programme would typically cover the topics under ‘financial guidance’ and give broad recommendations.

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Typically it is the young, free & single group that worry about their financial futures the most and according to research* employees in the UK reportedly take four million days off a year because of financial worries.


When considering how to help your employees with their financial worries it is imperative to put yourself in their shoes and be aware that they might feel embarrassed to discuss their financial struggles with their employer, for fear it may hinder their career prospects. 


Financial wellbeing doesn’t have to feel intrusive if it is approached in a considered and reassuring way.  If you appoint an experienced third party financial wellbeing provider and even consider hosting sessions away from the office it will already feel more private to your employees.  You can also reassure them through communications that all discussions will be treated in absolute confidence.  

So, in answer to the title of this blog - we believe that financial wellbeing is very valuable and approached in the right way is unobtrusive to your employees.  Giving them the time and arming them with the expertise they need to get their finances on track will leave them feeling valued and less stressed.

*Financial Wellbeing research - conducted by YouGov and Aegon - survey of more than 2,000 UK employees and 500 HR decision-makers.