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Personal debt in the UK workforce

The financial crisis of the last decade no longer makes the media headlines in the way that it once did, yet the effects of those years are still being felt within the national economy. One striking aspect of this issue is that the UK workforce continues to remain dangerously exposed to high levels of personal debt.

According to recent figures compiled by The Money Charity, the Citizens Advice Bureau in England and Wales dealt with more than 4,000 new debt problems every day in April 2018. This represented an increase of 21% on the same period in 2017. 

Employee debt problems

The Money Charity also highlights that there were 27,388 individual insolvencies in Quarter 1 2018 alone. These frightening statistics suggest that many individuals - many of them employed workers - across the nation continue to face a daily battle with problem debt. 

Employers will generally be sympathetic towards workers with debt problems, but some organisations will perhaps believe that these issues are not really their concern. Yet more enlightened businesses will recognise that financially stressed employees are likely to be significantly distracted (and therefore less engaged and productive) as a result of their financial problems.  This means that personal debt within the workforce is also a problem for employers too.   

Practical debt support

So employers would be well advised to provide some practical support to their workers around personal debt issues. The first port of call should be the organisation’s Employee Assistance Plan (EAP).  Most EAPs will provide free to use, confidential, and independent debt counselling as a standard feature, and the availability of such support should be regularly communicated to all staff. 

Yet the EAP option is often seen as a reactive tool, only to be used once debt problems have already become a major concern. So employers wishing to take preventative action should therefore also consider the provision of financial education services for their workers. 

Financial education for employees can be delivered in a variety of formats - including both face to face and online options - to ensure that all employees are able to benefit from the support provided. The ultimate aim of each option is to provide employees with the information and tools required to better manage their everyday spending and debt issues. This approach empowers the employee, and should ensure that far fewer ever reach the point of their debt burden becoming unmanageable.

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