As the UK focusses on delaying the spread of the coronavirus, many employees’ anxiety about the situation will be compounded by worrying about money. The impact the virus is having on the global economy and worry about having to take time off work means many employees will be concerned about the near future.
At times like these, employees need information and signposting from their employers, so they are fully aware of the options available to them. In the first instance, employees who are worried about the impact coronavirus will have on their finances should speak to their bank, credit card provider or lender. But there are some things that employers can do to help ease money worries.
Employees are looking at their trusted employer for help and direction. Providing direction, resources and guidance for staff worrying about their financial situation can help them to instead focus on what’s most important – protecting themselves.
1. Explain their employee benefits
Research conducted by The Money and Mental Health Policy Institute found that financial pressures are a common reason for employees returning to work early from sick leave, even when they weren’t fully recovered. Obviously in the current climate, this isn’t something any of us wants employees doing. Employees should be made aware of their rights should they contract coronavirus or be asked to stay at home.
Statutory Sick Pay
For employed people, their employer has an obligation to pay Statutory Sick Pay (SSP) for up to 28 weeks. Usually this would be subject to a three-day waiting period, but that is being temporarily abolished for at least 8 months. For small employers (under 250 employees), the Government will fund sick pay for the first 14 days. SSP will be payable to people who are staying home on Government advice, not just those who are infected. More information can be found from Gov.UK.
If employees need to provide evidence to their employer that they need to stay at home due to coronavirus, they will be able to get it from NHS 111 Online. Where an employee who is placed on SSP because they have been told to self-isolate, but SSP won’t cover their bills, they should be encouraged to speak to organisations like StepChange or the Money Advice Service who can advise them of their options.
One of the more popular employee benefits that employees will be seeking clarity on is travel insurance. As many employees will have booked holidays for Easter and the start of the summer, they will be concerned about losing money and what options are available to them.
While most travel insurers are taking steps to reduce their losses by adding exclusions to cover and stopping new policies, employees with existing policies will have lots of questions. However, today the Foreign & Commonwealth Office (FCO) has advised against all non-essential international travel, initially for a period of 30 days. This advice takes effect immediately and means for employees that have had travel insurance and travel bookings in place before the pandemic hit their country, they are likely to be covered.
Employees with travel insurance and/or booked trips coming up should be advised to contact their travel insurance provider as rules vary depending on types of policies and providers. Employees should also be encouraged to speak to their tour operator or airline to see what can be done with regards to moving the booking to a later date. More information can be found at the ABTA.
Financial experts expect the current downturn to continue but recover in a few months.
2. Encourage struggling employees to ask lenders for help
Some banks are already stepping up how they can support customers with NatWest and TSB (among others) offering customers affected by coronavirus the ability to delay their mortgage payments. Other lenders are also encouraging people who are struggling to speak to them about the possibility of delaying loan payments, getting more credit or accessing savings early.
Although decided on a case by case basis, for those who are being asked to stay at home where home working isn’t available, the move can relieve some of the financial pressure these employees will undoubtedly face. However, it’s important to note that payments will just be delayed, so repayments will be added to the mortgage and future bills may be slightly higher to accommodate this.
For those who rent, the Residential Landlords Association has advised its members to try to be flexible with tenants. They are asking landlords to arrange for money they’re owed from tenants to be repaid when things return to normal.
Councils have a hardship fund to help the most vulnerable people in their area and many financial services providers have set up coronavirus sections on their websites with information and support. Directing employees to the support available can help them plan for the near future and take comfort in knowing their options. More information can be found at the FCA.
In times of public crisis criminals don’t stop scamming.
3. Ease employees’ minds on market panic
The stock markets have taken a big hit over the last few weeks. This will make lots of employees concerned about the impact this has had on their savings, investments and pension funds.
However, it’s important to remember that this isn’t the first time and won’t be the last time the market dips. If we look at outbreaks since 1980 and their impact on the MSCI World Equity Index we can see that some epidemics did instigate a market impact like we are seeing now, but that they were relatively short lived – most drawdowns lasting less than a few months. SARS, Avian Flu (H5N1), Swine Flu (H1N1), MERS, Cholera, Ebola, Zika etc all lasted two months or less.
Market volatility is something that any investor should expect and be prepared for. When looking at things like pension funds, these are long term investments. Financial experts expect the current downturn to continue but recover in a few months. Employees can make use of existing financial education provisions to better understand the current situation and what their options are.
4. Promote financial education
I’ve written before about the alarming rate at which young people are being scammed and unfortunately, in times of public crisis criminals don’t stop scamming.
In a rare public warning, the UK intelligence agency this week warned the public about criminals exploiting them and their money. Experts from the National Cyber Security Centre (NCSC) part of GCHQ say they have detected attacks targeting people in the UK.
Fake emails pretending to be health authority communications are being sent to people with links to important coronavirus updates. However, these links infect devices with malware instead. Organisations like the US Centre for Disease Control and the World Health Organization are also being impersonated.
The Citizens Advice Bureau scam checker might be useful for employees who are suspicious about any communications they have received.
Help is available
Employers realise that the current situation is full of worry and stress for their employees and although their health should be their number one priority, employees will also need help with money.
Employees should be reminded that the FCA’s rules state that all lenders should treat their customers who can’t make payments with ‘forbearance and due consideration’. This means that providers have to listen to what their customers have to say and should look at doing things like missing payments or freezing interest.
Ultimately, employees are looking at their trusted employer for help and direction. Providing direction, resources and guidance for staff worrying about their financial situation can help them to instead focus on what’s most important – protecting themselves.