A salary sacrifice scheme is an arrangement between an employer and employee, where the employee will exchange a portion of their pensionable pay for non-cash benefits. Benefits can include vouchers for childcare, car hire, home computers and gym memberships. To create a salary sacrifice scheme a request must be submitted to your employer, and a review will take place to determine if you qualify. Salary Sacrifice Schemes can help to increase your overall take-home pay, so why is it something that isn't often spoken about in the workplace?
With the workplace changing, the benefits of a salary sacrifice may change, and both employers and employees must understand the current benefits, and how they could support employees' needs. A panel of speakers discussed the topic at The Great British Workplace Wellbeing Series.
Leigh Dunkley, Financial Wellbeing Lead at Schroders Personal Wealth, explains how the language surrounding the scheme needs to be changed and the message needs to be well enunciated as the information found on Government websites may look challenging and complex.
Adding to the conversation, Cheiu Cao, Founder & CEO of Mintago, discusses one of the biggest problems in society, “which is the fact that people are essentially sleepwalking through their careers and not putting enough money into their pensions. It is important to get people to start looking at ways around this and take it more seriously.”
Leigh Dunkley explains that the last taboo lies in our financial wellbeing as we have all invested heavily into our physical and mental wellbeing but missed out on the financial side of things. “A resolution to this could be creating and making a toolkit that is available to your employees when they ask what tools are available to them.”
The root cause of a lot of mental health issues are often financially related. Mental health also tends to be something that doesn't stay at home, so if your staff are having financial worries, it could be likely that this will affect their work ethic or capability. To avoid this it would be beneficial to bring in financial coaching to the workplace. Advising your staff on how to become more financially secure, and acknowledging their worries would be an effective approach to this problem. Knowing your value to a company both financially and emotionally can help you feel more in control.
Younger people in businesses also need to feel more empowered and comfortable in making good financial decisions at a younger age. When we think of salary sacrifices, and pension schemes many would automatically think of older staff members, but it is just as important that we are helping our younger generation set themselves up for a comfortable future. It is all about marketing and perfecting the language surrounding salary sacrifice schemes to increase people's knowledge ad understanding.