According to research by WEALTH at work, 80% of employers believe their employees are not saving enough for retirement.
This is usually due to affordability or lack of understanding but what many employees don’t realise is the huge difference small changes to their spending habits could make to their savings levels overall.
To help with this, WEALTH at work has shared its top 10 tips for employees wanting to cut their costs and boost their savings below:
1. Do employees know where their money is going?
Employees should check their bank statements and make a list of what they are spending each month. It is helpful to divide these into utility bills (gas, electricity and water), mortgage or rent costs, council tax, supermarket shopping, monthly contracts for TV, broadband and mobiles, insurance, regular subscriptions, and other spending. This will highlight where an individual’s money is going and where savings could be made.
2. Compare utility providers
Employees should consider visiting comparison sites to find out which providers may be the most cost effective for them. For example, by shopping around 50% of people could achieve a saving of £219 on their dual fuel energy cost according to comparethemarket.com Feb 2018 data*.
3. Look for discount vouchers
Do employees know that there are great discounts available for online supermarket shopping, holidays, restaurants, broadband providers and computers etc? For example, many supermarkets have offers such as £20 off first online orders.
4. Is the latest mobile phone really needed?
Employees could consider a SIM only deal rather than upgrading to the latest phone if their phone contract is coming to an end. With a contract, individuals are effectively borrowing money for the phone, and repaying this loan through a monthly bill. Also, tariffs should be checked as there are some very competitive deals available.
5. Regular contracts should be reviewed
Are your employees making the most of the subscriptions they have? Could they cancel music and other services that aren’t being utilised? They may benefit from calculating how much is spent on these types of contracts and seeing how much of a difference cancelling these may make. For example, savings of £156** a year could be made by cancelling a couple of subscription services.
6. Watch out for auto-renewals
Many insurance policies for cars, homes or holidays, automatically renew each year but employees may not be getting the best deal if they allow this to happen. For example, motorists who allowed their car insurance policy to be automatically renewed reported an average increase of £50 per policy ***. To get the best deal and to avoid any potential price hikes with auto-renewal, employees should shop around and either try to negotiation a better price, or switch where appropriate.
7. Write a shopping list
Employees should write a shopping list before they go out, whether it be for food, clothes, or whatever they need, and stick to it. Impulse purchases can add a fortune to the amount spent each month.
8. Consider cash back cards and sites
There are many cash back cards and websites now available which offer money back on spending. For some employees these might be a good idea, depending on how much they spend and where.
9. Staff discounts
Are you encouraging your employees to make the most of any staff discounts offered? By signing up to a workplace discount scheme, employees could get discount codes to high street stores or buy reloadable store gift cards, which allows them to buy the credit at a discounted price.
10. Employee benefits
It isn’t just discounts, there are other benefits available in the workplace to help employees save such as Share Schemes, Workplace ISAs and car allowances. Are employees aware of these and do they understand how they work? Financial education is a crucial part of engaging employees with these.
Jonathan Watts-Lay, Director, WEALTH at work, comments: “Learning how to manage money is an important life skill. We have educated thousands of employees on topics such as how to save money on bills and how to manage spending and debt, as well as the importance of saving from retirement. The lessons learnt can save a fortune over a lifetime.”