Navigating a changing debt advice landscape

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HR professionals must be clued-up on how to identify the best support for vulnerable employees

Vulnerability can stem from a range of life events or characteristics. Personal circumstances such as a recent separation, bereavement or disability can all be triggers. If an employee is experiencing financial hardship it is likely they will also be vulnerable to other issues. Despite this, financial vulnerability can often be forgotten.

What makes it all the more crucial to address is people's reluctance to talk about money. While an employee may feel able to talk about grieving the loss of a loved one or managing a physical disability, the stigma surrounding financial issues can leave people feeling as if they have nowhere to turn. Sometimes admitting to colleagues and bosses that they have been unable to take care of their finances feels humiliating: an admission of incapability.

In 2013 the Office for National Statistics reported that the UK economy lost 15 million working days to stress, anxiety and depression – so it’s in a company’s interest to take care of those who may be worrying about paying their bills.

It’s critical to have an idea of where to point staff, informed by a solid awareness of the debt advice landscape and the implications of being regulated by the Financial Conduct Authority (FCA). If a debt advice company is FCA-authorised it gives peace of mind that the organisation is deemed fairly run, low-risk, and a safer option for people to help solve their financial problems.

Over the past few months we have seen the debt landscape changing, and a number of fee-charging advice providers fold, most recently PDHL. This closure leaves 16,000 people in the lurch, so FCA regulation has never been more important if your workforce needs to seek advice.

For individuals seeking help, closures of advice providers can equate to stress and confusion around which is the ‘safest’ debt advice provider to turn to, and more of a reason to ignore the problem entirely. If individuals in your workforce have already started on a debt solution there are places to turn in order to mediate this uncertainty, as fee-charging firms have their books consolidated by bigger, FCA-regulated free advice providers.

If you feel that the person’s debts have spiralled out of control encourage them to contact a free debt advice provider. If you’re not sure which to recommend, you might already be working with an employee assistance provider, which will have a trusted firm to turn to.

There is a significant need for HR teams to recognise vulnerable staff who may need support, and be sufficiently knowledgeable to point them in the right direction to seek help. It is an employer’s responsibility to ensure its staff are working to their full capability. If finance worries are harming their productivity it makes sense for the company to step in and support them through a potentially stressful and emotional time, just as it would with any other worrying personal circumstance.

Stewart Dick is head of business development at PayPlan

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