Last week, the National Minimum Wage rose from £7.83 an hour to £8.21. That’s great news for many workers in terms of the cash in their pocket, but unfortunately a new tax year also means that bills are rising sharply.
With everything from TV licenses and car insurance to postage stamps and energy bills set to get more expensive, research suggests that the total cost could be as much as £240 more each year per household.
Council tax will go up by more than inflation for most people, gas and electricity prices are predicted to rise by as much as £117 a year and even water and NHS prescriptions are getting more expensive.
That means that pay rises, although welcome, will do little alleviate the budgetary constraints faced by many employees.
The Living Wage foundation has said that the minimum wage needs to increase to £10 an hour in London and £9 an hour across the UK – purely to keep pace with the cost of living.
It doesn’t help that alongside the bill hikes, inflation is pushing up the cost of the weekly shop.
What that means – put simply – is that more workers are struggling to make ends meet. And for many people, the challenges of managing day-to-day finances are seeming ever more insurmountable.
In a world of high inflation, rising bills and meagre pay growth, it is absolutely critical that people have a good understanding of how to budget and stretch their finances to meet the increasing costs of living.
Without good financial skills, the chances of making low levels of pay last through the month are low and the alternative is employees getting into debt to pay for the weekly shop or pay the gas man - hardly an ideal outcome.
Employers are well placed to help their employees with financial awareness, and there is strong evidence that staff welcome and appreciate this kind of benefit.
By offering financial wellness programmes, you can help your employees manage their finances better – leading to lower stress and better workforce productivity. Your employees will be happier but your business will thrive too.