Advice firms are stepping in to help their staff handle the cost of living crisis by offering pay rises, one off ‘top-ups’, and staggered payments.
Inflation currently sits at 9.4 per cent in the UK, a 40-year high, and gas and electricity bills for the most vulnerable households in Britain are predicted to soar to an average of £500 a month in January.
“We are all aware of the swinging increases in the ‘cost of living’ and with little gains to offset that,” adviser Philip Milton told his employees in an email on June 23.
“Sadly in this context we are in one of the industries which doesn’t benefit – higher inflation can worry investors and the markets and so our funds we manage fall and hence our income declines whilst all the costs rocket.”
As a result of the economic backdrop, Milton decided to make what he has named a “cost of living award” to everyone on his company’s books.
The financial remuneration will be staggered over two payments, the first arising in the autumn, and every employee at the Barnstaple-based firm will receive the same amount.
Milton is hopeful that inflation will fall, along with energy prices.
“Dare I say that I am in the minority in economics’ terms by expecting inflation to fall quite dramatically, including energy prices,” he told FTAdviser.
“I was also in the minority by predicting that inflation would rocket and exceed everyone’s views of 2 per cent”
Milton is not the only advice firm boss giving his employees a financial boost as prices climb.
Perceptive Planning managing director, Phil Billingham, has awarded his employees with a “one-off top up” and said he is “keeping an eye on the situation”.
Billingham added: “I suspect the next 12 months will be tough for many, and we need to support them where we can."
The firm gave all employees above-inflation pay rises earlier this year. But since then, Billingham noted “inflation ran away from us”.
He said: “We sat down and awarded another significant amount as a catch-up. It’s not a bonus, it’s not going on luxuries, it’s going on fuel and their families.
“We don’t want our staff to feel like they have to ask for a pay rise. Staff who worry about money don’t do good work. It would seem unfair for them to deal with high-worth-individuals every day and then struggle to get by themselves on the bare minimum.”
But Billingham said he may have to look at another inflation catch-up payment at the end of the year.