Debt Awareness Week: Financial Support for Employees
20 March 2025
‘Debt happens. Let’s deal with it,’ is the message StepChange Debt Charity is sharing ahead of Debt Awareness Week. Employees experiencing problem debt bring their financial anxiety to work, impacting their ability to manage stress, productivity and engagement. During this blog, we’ll share recent statistics that give insights into the levels of debt your employees face and the steps you can take to support them. Help enhance employee financial wellbeing to help your people thrive at work, home and beyond.
Research suggests that employees experiencing money worries cost the UK economy £120bn and 17.5 million lost hours of work, so it pays for employers to offer financial wellbeing support (Financial Capability).
What is Debt Awareness Week?
Debt Awareness Week, run by StepChange Debt Charity, brings debt awareness solutions to the Nation. Debt isn’t something to be ashamed of - anyone with a mortgage or credit card is in debt. As StepChange says, ‘Debt happens. Let’s deal with it.’
When it comes to debt, you need to act, speaking to those who can provide support and help you manage the situation before it gets out of control.
What is Employee Debt?
As your employee benefits and engagement partner, we’re bringing this conversation to the workplace and your employees. When you investigate employee debt online, you’ll find situations where the DWP may deduct benefits overpayments directly from an employee’s salary - reclaiming debts that way. For this blog, we’re taking a more holistic approach, highlighting the debt your employees face and what you can do to support them when debt becomes problematic - or even prevent it from occurring.
By the end of August 2024, people in the UK owed £1,864.9 billion - an increase of £27.39 billion on the previous year and an extra £507.32 per UK adult. From January to September 2024, the Citizens Advice Bureau in England and Wales dealt with 1,227 debt issues every day (The Money Charity). Still, only a third of the 9 million Brits in serious debt seek help (Financial Capability).
Over half of people of working age in the UK live in households with less than 3 months’ wages saved, and the cost of living has been rising since 2022. What started as a steep incline has steadied, but with businesses facing increasing costs, consumers are set to feel the pinch.
Your employees face different challenges depending on their circumstances. House prices may have fallen, but renters deal with record-high charges (ONS). In August 2024, the average debt per UK household clocked in at £65,665. On average, each UK adult has over £4,000 worth of unsecured debt (The Money Charity).
What’s Causing Employee Debt?
Remember, not all debt is bad; mortgages, car finance agreements and credit cards all contribute to what’s considered a personal debt. Most of the time, we can manage these payments. It’s when what’s coming in can’t cover the cost of what we need to pay out that problems begin.
As we explore in our blog, ‘Benefits on a Budget: Employee Discounts Schemes,’ the median pay increase recorded in January 2025 was 3%, which is currently less than the rate of inflation. Many employees will find themselves in a situation where their salaries won’t stretch as far as they need to, even with a pay increase.
When money doesn’t stretch far enough, the first thing people consider is making cuts. It's a practical approach, but there are expenses we can’t ignore, like our rent, mortgage, utility bills, or the cost of keeping a car on the road. When salaries can’t keep up with the increasing cost of living, employees are more likely to find themselves getting into a cycle of debt - and this is when employee debt becomes a problem.
What is Debt Support?
Debt Awareness Week is the perfect time to launch or revive your employee financial wellbeing initiatives to support employees facing debt and prevent others from falling into it.
There are many ways you can provide debt support, which we’ll review next, but before you embed any strategies, you must create an environment where employees feel they can turn to their employer or manager for help. Too many people suffer problem debt in silence, and it’s not a hole they can easily dig themselves out of alone. Knowing that their employer has their back and will help them find the proper support can mean the difference between spiralling and thriving.
Financial Education
Why consider offering employee financial education? Because 39% of adults (20.3 million) don’t feel confident managing their money (Financial Capability). As an employer, you can bridge the knowledge gap by providing money management and budgeting workshops.
Financial education could be through an online course or external experts coming into your business to answer questions employees may not know they need to ask.
Money Management and Budgeting
Our Financial Wellbeing App allows employees to access wage withdrawals ahead of payday, track their earnings as they work, build up savings directly from their pay, chat with qualified financial coaches, check their financial health score, and more - all in one app, with no change to payroll.
Financial First Aiders
Financial First Aiders are employees trained with knowledge of financial wellbeing. Their role is to provide a confidential ear and peer-to-peer support, enabling them to help colleagues experiencing financial difficulties. By providing free and impartial guidance and signposting colleagues to additional resources, Financial First Aiders can help before debt becomes unmanageable.
Employee Financial Support
If salaries aren’t stretching far enough and pay rises aren’t making the desired impact, strengthen your financial wellbeing strategy with employee benefits.
- Our Employee Discounts Platform provides up to 20% discount on everyday essentials, holidays, treats and experiences your employees and their families can enjoy. Available on the go, employees reap the savings when they purchase discounted voucher codes from a vast range of high street and high-end retailers, online and in-store.
- Our Pluxee Card is another way to offer significant financial support to your employees and their families, as they can top it up themselves, earning them up to 25% cashback at participating retailers. It’s also great as a budgeting tool because your employees can load money onto their balance and use it to earn cashback on their weekly shop and other essentials.
Salary Deduction Schemes
We have two salary deduction schemes - SmartPay and Refurbished Tech - and both help employees spread the cost of tech and lifestyle purchases - even home improvements - without getting into debt.
The average credit card debt per UK household in August 2024 was £2,518 (The Money Charity), which is rising. Outstanding credit card debt in the same month totalled £71.5 billion - a 6.38% increase on the previous year.
The problem with relying too much on credit is that it can become a cycle. So can the debt, especially if you can only make the minimum monthly repayments. With a salary deduction scheme, employees have control over the repayment terms and have a clear view of how much money their employer will deduct from their account each month - no interest added!
Employee Loans & Savings
You can make it possible for employees in debt or with little extra at the end of each month to become active savers. With a Salary Finance scheme, your employees can create a savings pot alongside their loan repayment. Plus, once employees have repaid the loan, they can continue to make monthly payments. Instead of paying off a debt, they’ll build up a nice little nest egg.
Food for thought... It takes 13 years for a first-time buyer on an average UK salary to save the money they need for their deposit (The Money Charity).
Debt Consolidation
30% of adults have reported that meeting mortgage, loan repayments and monthly rent has been difficult during the cost-of-living crisis (ONS). Those unable to meet essential payments are more at risk of entering debt.
Debt is a cycle, and one often leads to another. When debt is at its most dangerous, people risk being buried by multiple creditors chasing them for payments. Debt consolidation by Salary Finance helps your people combine their debts into one manageable payment, often with substantially less interest than high-street lenders. It minimises money worries, makes everything easier to cope with, and helps people pay off debts quicker.
Support Employee Mental Health
The ONS ran a study on financial anxiety in adults, with 82% of interviewees in the 30 to 49 age group feeling either ‘somewhat’ or ‘very worried’ about the rising cost of living.
In addition to offering financial education, salary-stretching employee benefits and salary finance solutions, your people will also benefit from mental health support. There are different levels of anxiety, but in its worst case - severe anxiety - it can be debilitating within all areas of a person's life. It could even affect an employee’s ability to perform their role, exasperating workplace stress and the risk of breakdown or burnout.
You can give your people a safe space to turn.
Embed an Employee Assistance Programme into your business. It also includes financial wellbeing features, which will provide your people with access to BACP-accredited counsellors 24/7, ensuring there’s support available whenever they need professional and confidential help. They’ll also have access to information specialists who can provide debt support.
Boost Employee Financial Wellbeing with Pluxee UK
There isn’t just one solution for supporting employees financial wellbeing. A business needs a culture of trust, encouraging openness about any financial difficulties they may be experiencing. From there, employers can understand the steps they need to take to provide assistance that’s fit for purpose and will make the most significant impact.
Pluxee UK has been supporting employers for over 40 years, and we continue to make it our mission to help you help your people succeed - through times of crisis and beyond.
