Month: June 2024

How can you reduce staff turnover?

At a time when economic growth is sluggish, many are hoping that the nation’s wealth creators will be able to drive an increase in output over the coming months.

So as a business owner yourself, what practical steps can you take, beyond stepping up your marketing activity and delivering the best possible service to your customers?

Well, looking after the mental health of your staff is key, as last year, the UK economy lost 17.1 million days of sickness absence to work-related stress, depression and anxiety.

According to research by Unum UK, just 49 per cent of UK employees believe their employers are adequately equipped to manage mental health issues.

That’s a real concern, as 78 per cent of respondents said they’d be willing to leave their jobs due to excessive stress and a lack of mental health support in the workplace.

Only one issue – salary considerations – came ahead of mental health in the list of factors driving employee turnover, so it’s clear that it’s something employers can’t just ignore.

Invest in wellness programmes
So what’s the solution? Well, it’s clear that employees value mental health support.

In fact, 57 per cent of UK employees said that if robust health and wellness programs were in effect in their place of work, they could be convinced to stay.

This points to a clear call to action for businesses: investing in comprehensive mental health strategies can significantly reduce staff turnover.

Taking action for a healthier workforce
Liz Walker, Chief Operating Officer at Unum UK, described the findings as “concerning” and called on bosses to act.

“There’s still work to do for some employers, including introducing high-quality proactive measures to address and support workplace stress and overall mental health,” she said.

“By creating positive, supportive and inclusive working environments, employers can not only improve employee retention but also help foster a healthier, more engaged and productive workforce.”

The Workers Union added: “This superb study is a crucial indicator of the needs and pressures facing the modern workforce, which we have been highlighting for many years.

“Addressing these challenges is essential not only for the wellbeing of employees but also for the health of the entire business sector.”

Investing in your employees’ mental health might require some effort, but the results are clear: a happier, more productive, and loyal workforce leads to less disruption and a thriving business.

And that can only be good for the wider economy too.

Fiscal Drag Means HMRC Tax Haul Outpaces Inflation…

It’s never been more important to use all of your your tax allowances. As the election campaigning ramps up we will hear more and more about tax cuts to in votes, but the latest data from HMRC shows that their total revenues from tax receipts and National Insurance Contributions were £827.7bn from April 2023 to March 2024, up £39.1bn on the previous year.

It has increased by a striking 83% since the Conservatives came into government in 2010, when it was £453bn. Inflation over the same period has only increased by 49%, which means a purely inflationary increase would have only cost taxpayers £674bn, some £153.7bn less than they paid in the past year.

And it can’t all be blamed on Covid. Since the year 2019/20 tax revenues rose from £633bn to £827bn, a rise of 31% versus an inflationary equivalent of 23%. Well above inflation but better than the 14 year trend.

Much has been made of the fiscal drag, as personal income tax allowances have been static for a number of years, bringing many more people than ever before into paying tax or into a higher tax threshold. It’s expected that around 2.5m more people will be paying tax in 2024 as a result, causing well publicised problems for HMRC’s overloaded helpdesk services.

Personal income tax allowances and thresholds have been frozen since 2021, and Jeremy Hunt announced his intention to continue this until 2028. They would normally increase in line with CPI. The personal allowance and higher rate thresholds have been £12,570 and £37,700 since 2021, respectively. If they had been linked to CPI they would have been set at £15, 225 and £60, 886 for 2024-25 respectively. To someone earning £50, 000 that equates to £13, 000 in extra tax paid over the duration of the allowance freeze.

That said, the personal allowance was just £6, 475 in 2010/11 and despite the recent freeze £12, 570 now is arguably a reasonable increase in real terms during that period.

We will undoubtedly hear more about this as we the polling stations, but it is not a problem specific to the current government. It is unclear if or how Labour plan to address this as they have avoided any real detail on the subject to date.

Rishi Sunak has promised to keep the state pension free from tax if he returns as PM, but that won’t help those below state pension age and will be a relatively insignificant tax saving to those enjoying a decent retirement income with little reliance on the state pension. Both parties face a difficult balancing act as the undoubted generosity of the triple lock pension which has boosted state pension earnings beyond anything originally anticipated, is a major reason why more retirees face paying tax. At the same time it’s an enormously popular policy amongst pensioners for obvious reasons, and neither party dares remove it.

What is clear is that you should use every tax allowance you do get to its maximum. This is a subject we will cover at your next review meeting.

Why you should get to grips with your finances…

We’re all busy people and our spare time is very precious to us.

So it’s no surprise that many of us are neglecting vital life admin and instead spending time on – how shall we put it? – less important pursuits.

According to research by Moneybox, UK adults spend an average of 48 minutes a week scrolling through social media platforms and 39 minutes a week playing video games.

By contrast, we’re spending just 24 minutes a week looking at our money, reviewing our expenses, budgeting and planning ahead.

Furthermore, just 20 per cent of those polled said they consistently spend time researching the best financial products for them, and 28 per cent admitted they don’t know how to choose the right financial products for them.

Take control of your future
Imagine knowing that you’re able to afford a dream holiday, buy a bigger property or pay for your child’s education because you’ve reviewed your finances.

It could make a huge difference to your life, both in the short and longer term.

So why are we neglecting this vital aspect of our lives, missing out on opportunities to maximise our wealth and storing up problems for the future?

After all, if you’re on top of your finances, you can plan ahead with confidence, and avoid that feeling of dread and uncertainty when letters from your bank, building society and investment manager drop through your door.

As Brian Byrnes, head of personal finance at Moneybox puts it: “Setting aside time every week to review your budget, research the best financial products for your needs or make a plan to help you achieve an important financial goal will make a huge difference to your confidence and your financial position over time.”

Mr Byrnes shares good advice that all of us should follow, regardless of whether we’re on modest or high salaries.

Taking a look at your income and outgoings after tax, including your utility bills, pension contributions, savings and investments, means you can have a clear idea of how much disposable income you have each month, where savings can be made and how much you could possibly invest elsewhere.

Next, researching the best financial products means you can be sure you’re picking the right ones for you, your family and your circumstances.

And if you have specific financial goals in mind, you might have extra motivation to get on top of your finances, actively maximise your wealth and make better, more informed choices, as you’ll have an end point that you’re determined to reach.

Get professional financial advice
Of course, researching the market and navigating the complexities of the financial world can seem daunting and time-consuming, particularly if you have countless other responsibilities on your plate.

But help is at hand.

An independent financial adviser will take a look at your specific circumstances, priorities and objectives, and advise you accordingly.

They’ll also be fully up-to-date with the latest market developments, regulations, product offerings and investment opportunities, so they can point you the right way when market conditions change.

At the same time, they’ll be able to help you set clear and realistic goals, manage your risk exposure and reduce your tax liability.

You can then get on with living your life with confidence and certainty, safe in the knowledge that you’re making informed financial decisions that align with your goals and objectives.

If you have any questions about managing your finances and setting yourself up for the future, please feel free to contact us and we’ll be happy to speak with you.