The TUC has today announced that household debt in the UK has increased by nearly £1,000 per household to £15,385, in the past year.
The figure which includes, bank overdrafts, personal loans, store cards, payday loans, outstanding credit card debt and student loans but excludes mortgages, totals £428bn nationwide.
With that, wellbeing expert and CEO of Health Assured, David Price offers some advice to employers, on what they can do when a member of staff might be in debt.
“It is not uncommon for bank accounts to feel the squeeze after the Christmas period. Experiencing money problems can seriously impact an individual’s mental health and overall productivity at work so employers who take measures to help employees when they are struggling may find that a little support is beneficial for all.
“One of the main issues with financial difficulties is that employees may not be forthcoming with information. If employers have a suspicion that an employee may be struggling with debt, the employee should be encouraged to talk about it. Chats of this nature should remain confidential and employers should keep in mind that employees may feel embarrassed, or worried that their financial struggles may impact their job prospects.
“Depending on the initial discussions with the employee, employers may be able to identify various channels of assistance. If, for example, the employee is paid in line with National Minimum Wage, the employer could consider increasing their pay in line with the ‘real’ living wage. This is a voluntary commitment to paying employees an enhanced hourly rate in line with the cost of living, which currently stands at £10.55 per hour in London and £9.00 per hour for the rest of the UK.
“Employers may consider offering the employee the chance to work paid overtime to earn some extra cash. This will not be an option for all businesses due to a number of factors but may be suitable if overtime is available either in the employee’s usual role or another which is within their capabilities.
“Alternatively, offering an advance on salary may be useful, however, it only presents a short-term remedy rather than a long-term solution.
“A signpost to expert external advice may, on the other hand, provide the opportunity for longer-term assistance on managing money or debt counselling. Employee Assistance Programmes (EAPs) are useful in this situation as they typically offer a range of services designed to support individuals and can include help with financial wellbeing.