new wage: what should employers do next?
TRANSCRIPT
HR journalist and editor Peter Crush asks if now’s the right time forHuman Resources Directors (HRDs) to engage young employees with
their finances
NEW WAGE: WHAT SHOULD EMPLOYERS
DO NEXT?
"IN THE LAST FIVE YEARS THEPRICE OF THE AVERAGE STARTERHOME IN BRITAIN HAS INCREASEDBY 30%...
RISING FROM£168,212 TO£219,214
YET REAL WAGES DURING THISSAME PERIOD HAVE FALLEN"
"FIGURES FROM THE ONS SUGGESTYOUNG COUPLES AND FAMILIESARE NOW £900 WORSE OFF, PERYEAR, COMPARED TO A DECADE
AGO"
"FROM 6 APRIL 2016, THOSE OVER 25 AND ON MINIMUM WAGE,HAVE SEEN THEIR INCOME BOOSTED BY AN INFLATION‐BUSTING 50PPER HOUR THANKS TO THE INTRODUCTION OF THE NEW £7.20 PER
HOUR NATIONAL LIVING WAGE (NLW)
WHITEHALL ESTIMATES 2.7 MILLIONPEOPLE WILL SEE THEIR PAY GROWBY £5,000 OVER THE NEXT FIVE
YEARS, WHEN THE LEVEL IS EXPECTEDTO HIT £9 PER HOUR"
"IN AN IDEAL WORLD, SUCH AN INCOMEBOOST WOULD APPEAR TO BE THE
PERFECT TIME TO RE‐ENGAGE WITH LOW‐INCOME EMPLOYEES WHO MAY HAVEEITHER NOT QUALIFIED FOR, OR OPTED
OUT, OF AUTO‐ENROLMENT ON GROUNDSOF UNAFFORDABILITY"
"ACCORDING TO THE DWP, AROUND7% OF PEOPLE UNDER 30 ARE OPTING
OUT OF A PENSION, BUT WITHMINIMUM WAGE EMPLOYEESWORKING 37 HOURS A WEEK
STANDING TO EARN AN EXTRA £74 AMONTH THIS COULD CHANGE"
"IF JUST £22 OF THIS WAS SAVEDEACH MONTH FOR 40 YEARS,THAT WOULD TURN INTO A‘FREE’ POT WORTH £56,500"
(ASSUMING 5% GROWTH)
"STAFF MIGHT FEEL ABLE TO PUT THEEXTRA MONEY FROM THE NLW ASIDE TOSAVE INTO A PENSION. IT’S THEN THAT
HRDS CAN REALLY GIVE THEM THE TOOLSTHEY NEED, LIKE ROBO‐ADVICE SERVICES
THAT PROVIDE ONLINE PENSIONSADVICE"
"SOME ORGANISATIONS ALREADY HAVE PAYROLL RULES THAT PUT APERCENTAGE OF ANY PAY RISE STRAIGHT INTO AN EMPLOYEE’S
PENSION CONTRIBUTION AT SOURCE
THIS MEANS STAFF CAN BENEFITFROM THEIR PAY RISE, AND
WON’T MISS A SMALLPERCENTAGE THAT THEY’VENEVER RECEIVED, MAKING ITSIMPLER TO BUILD UP THEIR
PENSION POTS"
"NLW MIGHT NOT BE MUCH, BUT USED IN COMBINATION WITHOTHER BENEFITS, IT COULD BE ALL SOME NEED TO MAKE APOSITIVE CHANGE TO THEIR SPENDING AND SAVING HABITS
IT’S NOT THAT YOUNG PEOPLEDON’T WANT TO SAVE FORTHE FUTURE, THEY JUSTDON’T FEEL THEY CAN
AFFORD TO PRIORITISE IT INTHE FACE OF OTHER DAY‐TO‐
DAY PRESSURES"
FOR MORE ABOUT HOW WE CAN HELP YOUREMPLOYEES WITH COST‐EFFECTIVE AND
REGULATED ADVICE, FIND OUT MORE ABOUTPENSION WIZARD
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