Neyber, the market leading provider of financial employee benefits, has called on the Government to give UK employees the statutory right to access fair financial services and free financial education in their workplace. This follows Neyber giving evidence to the House of Lords Financial Exclusion Select Committee, where the company set out its employee benefit reform agenda.
In a letter to the Rt Hon Damian Green MP, Secretary of State for Work and Pensions, Neyber’s Chief Strategy Officer, Monica Kalia said:
“I am writing to you in my capacity as Co-Founder and Chief Strategy Officer of Neyber, a provider of affordable loans for key workers, to demand that UK employees have a statutory right to access low cost loans repaid by salary deduction and free financial education in their workplace. This is because there is indisputable evidence of a financial crisis affecting people throughout the UK’s employment market; with millions of hard working people just able to manage, not least as a result of their paying punitive interest rates.
“Our own independent research of 10,000 employees1 evidences the consequences of this, with:
70% of the UK workforce admitting to wasting a fifth of their time at work worrying about finances, costing the economy an estimated £120.7bn per annum
At least 17.5m working hours being lost per year as a result of workers taking time off work due to financial stress
55% of employees saying that being under financial pressure affected their behaviour and ability to perform their job in the workplace – rising to 62% for those under 34
51% saying that financial pressures affected their relationships with their colleagues
31% losing sleep over money concerns, with 39% suffering from anxiety
“The report also evidences how those “just about managing” lack sufficient buffer savings to meet emergency expenditure needs; with over 30% of employees having less than a month’s salary held in reserve for these purposes. Those unable to meet short term expenditure needs are likely to resort to pay day lenders, further compounding their indebtedness and financial exclusion.
“We believe this problem could be mitigated through employees having the right to access low cost loans repaid by salary deduction and free financial education in their workplace, in the same way employees are auto-enrolled into their company pension schemes; as proposed by Neyber to the House of Lords Financial Exclusion Select Committee.
“These services would ideally comprise a range of loan and savings products tailored to the needs of individual employees; all of which would be focused on the management of debt and the development of a renewed savings culture within the UK’s 30 million strong workforce. They would also help employees to surpass the unjustifiably high interest rates charged by high street banks and pay day lenders, who can diminish financial wellbeing through their higher costs of credit.
“We urge the Government to consider addressing this issue as a priority, especially as our research has shown that demands exist in the workforce, with over half (53%) of employees seeking access to affordable loans and savings in their workplace.
“The introduction of the right to low cost loans repaid by salary deduction for employees would also support the Prime Minister’s commitment to help those “just about managing”, through advantaging those who choose to work instead of relying on welfare benefits. Given these factors I would be keen to meet with you and your officials to discuss how this new “right to fairer finance in the workplace” could be designed and delivered, and to understand if the Government has commissioned any of its own research into this area.
“In the same way that auto-enrolment was brought in as part of the Pensions Act 2008, we believe that similar legislation could be brought forward to ensure that workers have a right to access fairer finance in their workplace. As the leading provider of low cost loans repaid by salary deduction to thousands of public and private sector employees, with over £40M million lent to date, Neyber is well placed to help in this context.
“I look forward to your response and to working with you on delivering a much needed extension of rights in the workplace.”
Neyber was founded by former Goldman Sachs investment bankers Martin ljaha and Monica Kalia along with financial technology expert Ezechi Britton. The founders joined together to deliver a genuine alternative to the solutions offered by financial service providers whose high borrowing rates and low returns on savings have helped to create an unprecedented era of financial stress.
To find out more about Neyber, please visit the website: www.neyber.co.uk
Neyber won the Benefits Innovation of the Year category at the Workplace Savings and Benefits 2016.
1 The DNA of Financial Wellbeing