Rising inflation, the biggest pay drop since 1990, soaring utility bills, and tax hikes are impacting the well-being of UK employees and families alike.
In times like these, how to support employee wellbeing amidst the current cost of living crisis should be a question on the mind of every UK employer. However, financial well-being is often an overlooked element of employee support, even though one in four employees states that money worries affect their ability to do their job. (https://www.cipd.co.uk/learn). This figure will almost certainly be on the rise now thanks to the current financial climate.
Employees and employers alike are feeling the squeeze in all areas.
Fuel prices set to increase to an average of £2,900 per household per year
Hikes in supply costs
An estimated double-digit rise in the cost of living, by the Bank of England
UK inflation, the rate at which prices are rising, jumped to 9% in latest figures.
Prices rising at their fastest rate for 40 years due to higher energy bills.
And paltry growth
This financial squeeze is pushing people to make unwelcome choices and turn to payday loans and credit cards to ease the pressure. "It's got to the point that I turned to a payday loan, but they want you to borrow more than you need. We can't always go to the food bank, it's a vicious cycle," Faith Angwet, stated in an interview with the BBC.
A recent survey by the Office for National Statistics revealed that during the first half of March, 21 percent of respondents who rent property were using credit cards more than usual to cope with increased prices.
And it's not just the current generation who are affected. As explained by a treasury spokesperson: "Public debt is at the highest levels since the 1960s and rising inflation is pushing up our debt interest costs, which means we must manage public finances sustainably to avoid saddling future generations with further debt."
The recent financial constraint has also seen a rise in the proportion of people seeking advice who said that cost of living pressure was a reason for their debt in February, according to Debt charity StepChange.
Chancellor Rishi Sunak is no doubt also feeling the pressure to support and guide UK households amidst the latest series of tax increases and repeated fuel cost hikes, plus a recent prediction from the Bank of England stated that without “targeted support we expect a further increase in extreme poverty."
Andrew Bailey, the Governor of the Bank of England’s recent predictions were of rising unemployment, looming economic contraction, and double-digit inflation- and the statistics released today confirm that trend with UK inflation hitting a 40-year high of 9%.
These are grim times. But there is also hope.
Rising costs and taxes and the current unstable 'vicious cycle', as Faith Angwet put it, means that people need more control over their income as well as instant access to money earned. Creating this kind of financial security improves people's well-being and productivity, positively impacting both family and work life.
In demanding times especially, businesses must step up to their corporate and social responsibility and explore all ways to improve working capital so that it benefits the business, the employer and the employee.
One way to provide financial security to both employees and employers is by giving control over cash flow, thereby reducing the need for loans and debt and increasing the overall well-being of both the business and the individual.
Creating this freedom of cash flow and working capital is something Hi is dedicated to. People need access to their money to create financial stability, and Hi is providing that with on-demand payroll and an all-new cash flow payroll tool.
To find out more about how Hi can free up your financial well-being, please get in touch. We’d like to talk with you and see how we can support you further.