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Free stuff. Oh yes.

14 January 2019

Free stuff. Oh yes.

Ok, I’m an Aberdonian. A proud one at that. But we are rather known for being tight, canny, frugal, or just plain stingy. By the way, one of my favourite twitter feeds is @doricdictionary which is another thing we are famous for, our incomprehensible dialect. I will however forthwith revert to the Queens English and assure you that I have managed for the last 30 years to communicate well in business and that isn’t changing!

So, when someone wants to give me something that is free and can do me good, then they have my full and undivided attention. This seems like a win-win situation and unless I’m missing something then it should be a no-brainer, right?

Let’s focus for a minute on financial wellbeing, education, mindfulness or whatever way you want to refer to it. We all know it’s part of your general Health and Wellbeing strategy now, employers seem to have been given that mantle, as its simple to get to large numbers of people easily, in an environment that they are probably more inclined to listen in.

Where does the free bit come in then? The core benefits that you offer to employees are always going to cost. Your pension scheme, the protection and medical benefits that you provide are there to stay on the P&L and add significantly to your annual costs. Nothing much is ever going to change that, so employers are looking for increasingly clever ways to offer benefits that align with wellbeing.

Funny that there is a whole market out there developing products that are free to access for your employees with the sole aim of giving them tools to be better informed and therefore financially better off.

It really doesn’t matter the companies that are named in here, there are no agendas, simply a mention to those that have blazed the trail in certain areas. These are by no means new options, many have existed for some time, but they are still underutilised and many more employers could and should take advantage of them, building a fuller strategy around them.

There are two main players in the affordable loan market, Neyber and Salary Finance. The simple principle here is that they will lend your employees money at a lower rate than the banks because your employees have a job and the lender can deduct directly from payroll, thereby assuring repayment of the loan. The savings over high street rates, never mind the rates that some may find in some of the more esoteric of lenders, are significant, some say worth up to a 5% pay rise. This benefit is both free to employers and aligned with an element of financial wellbeing.

Recently, the whole phrase Workplace Savings has come home to roost. We stopped calling it pension years ago you know! Workplace Savings encompasses ISA and more general savings options as well as the pension scheme. The likes of the main pension providers have offered these for some time, the disadvantage is that they offered only their own funds and some couldn’t do payroll deduction. With the launch of the likes of Smarterly, employers can now install another free benefit to employees that allows them to save for anything other than retirement in a portfolio that suits their risk profile from only £50 per month.

The aforementioned Salary Finance has just launched a trial service with NEST which allows employees to pay more into their pension scheme over and above the AE minimums. Contributions are initially split between an emergency savings pot and the auto-enrolled pension. When the balance of the emergency account reaches a predetermined threshold level, contributions are fully invested into the pension.

If the employee accesses these emergency savings, then further contributions are again split between the two, until the savings cap is reached again. If you have a NEST scheme, this should be available to you soon. All free to use.

These alone will never do the job, but they are the sum of all parts, pieces of the jigsaw. When employers think of their strategies around this, don’t think cost, think benefit.

benefits. smarter.