Far too many people – 7 in 10 UK workers are ‘chronically broke’ – according to a new Royal Society of Arts (RSA)/Populus survey of 2,000 people.
Excessive debt is dangerous to the economy, businesses and families, with UK unsecured consumer debt at record levels: over £200 billion as of January 2018. This level of personal debt hasn’t been this high since before the credit crunch and global financial crisis in 2008.
Savings are also at record lows, with 32 percent of those surveyed with less than £500 in savings. Low savings and high levels of debt are a lethal combination, especially if the economy encounters any Brexit-related shocks. Wages aren’t expected to rise much in 2018, not compared to inflation, which could further erode living standards and spending power.
More people than ever are facing financial ruin, with scarily high levels of utilities, phone, council tax and rent arrears impacting household finances. According to The Money Charity, 52 mortgage possession claims and 37 mortgage possession orders are made every single day (21 properties are repossessed every day). When it comes to rental properties, 371 landlord possession claims and 275 orders are made daily around the country.
Lenders and banks are quicker than ever to apply for a County Court Judgement (CCJ), with the number issued up 24 percent in 2017. Yet the value of individual and business CCJs has dropped, indicating those in debt have less time to pay up or maintain a payment plan before creditors will seek a CCJ.
One of the main challenges, for anyone in debt, is reducing it (consolidation) and setting money aside, starting to bank savings.
FairQuid is one fintech company offering a solution that will help anyone with a job (employed over one year), who’s employer is a member of their Employee Benefits scheme (membership is free for companies) reduce debts and start saving.
Savings are often taken from whatever isn’t spent that month. With the FairQuid Employee Benefits scheme, savings and any money to pay off consolidated debts are taken ‘at source’, from the Net salary amount before it’s paid into employee bank accounts, making it far easier to save and pay off debts without needing to budget to set aside a certain amount.
With one cost already out of sight, out of mind, people can budget more effectively. And since these savings go into member-owned credit unions, savers can benefit from healthy dividends on their savings – so paying in also pays out.
Approximately 1.7 million people in the UK belong to a credit union. These are nonprofits, designed to help everyone, regardless of their circumstances take control of their finances Whereas traditional banks use your money to generate profits and bonuses for senior managers and shareholders, credit unions are founded on the mutual benefits for their members. And the fact that credit unions are protected by the FSCS makes them just as secure as banks.
FairQuid is already helping hundreds of employees in dozens of companies in the UK and abroad improve their finances.
In the UK, they are working with Preston-based Recycling Lives to improve employee financial wellbeing. Both organisations are focused on making a positive impact with a social-minded approach to what they do, which made this a perfect solution for Recycling Lives.
So far, 21 percent of the Recycling Lives team have signed-up to loans and savings accounts. In comparison, other employee benefit services that companies offer, including gym membership, bikes, and health screenings, have a much lower uptake rate nationally, usually between 5 and 10 percent, according to Towers Watson research.
Those who have signed-up are already seeing positive results. Debts are down and savings simultaneously up, with most already saving over £500, above the national average. First Choice CU last year’s dividends on savings was 0.75% and the first £250 in dividends from Credit Unions is even tax free.
Claire Dallison, head of HR for Recycling Lives, said: “FairQuid has been a real life line for staff. It has helped staff get on top of their finances while allowing them to put a little bit away for emergencies in future. It has helped staff to get deposits on properties or complete home repairs so their housing conditions have improved. In particular, it has been useful for staff whose cars have broken down, therefore affecting their ability to get to work. It has led to a more engaged workforce and helps overcome previous obstacles that may have interfered with their ability to sustain a job.”
Vishal Jain, FairQuid’s CEO and Co-Founder added, “FairQuid is honoured to be able to support Recycling Lives as it undertakes its crucially important work by helping to provide actionable financial wellbeing solutions to its staff. As a progressive employer who takes an active interest in the wellbeing of workers, Recycling Lives, is an amazing example of a company that strives for business and social objectives.”
About Recycling Lives: Recycling Lives is a recycling and waste management business, with nine sites across the UK. It processes and recycles scrap metal, scrap cars, general waste and waste electrical and electronic equipment for major businesses and local authorities, using state-of-the-art infrastructure and machinery. Central to its customer offer is the guarantee of creating social impact from its operations, through its associated charitable activities reducing reoffending, supporting homeless people and redistributing food.