close
Get Started Today

Please fill out the form below and a member of our
team will be in touch with you soon.

    Tag: cost of living crisis

    The importance of financial wellbeing

    Posted on by Laura Bannan

    The importance of financial wellbeing

    In the midst of the greatest cost-of-living crisis in generations, ensuring the financial wellbeing of your workforce is paramount, and arguably more important than ever. Team members at all levels are feeling the strain, and channels of communication must be opened to ease the burden of worry felt by so many. Research has found that people who have positive financial wellbeing are far less stressed about money, which in turn, has a positive impact on their overall mental and physical health.

    Poor financial wellbeing is also linked to productivity in the workplace, with some of the common causes being down to:

    • Stress and tiredness as a result of reduced sleep from being kept awake worrying about finances
    • Absence from work due to poor mental health which financial stress is a key contributor to
    • Managing finances and thinking about financial worries during working hours
    • Poor decision making as a result of constant financial worries

    The key to a strong strategy is remembering that your company consists of individuals with differing needs. Employers should select the most appropriate support for their people and ensure that advice is tailored to each person’s specific needs – not a ‘one-size-fits-all’ solution.

    How can we help?

    At PM+M we have designed a unique programme that offers personalised advice to help employees effectively manage their financial health. Delivered by experts from our financial planning team, our financial wellness sessions provide an introduction to financial planning best practice and guidance, covering topics such as:

    • Budgeting
    • Savings
    • Effective planning
    • Goal setting
    • Useful hints and tips

    Key benefits

    Some of the key benefits of our financial wellbeing programme include:

    • Reduced financial stress: by providing employees with the tools and knowledge to manage their finances, our workshops will help to reduce financial stress. Lower stress levels can lead to increased job satisfaction and improved mental health.
    • Enhanced productivity: When employees are worried about their financial situation, it can negatively impact their work performance.
    • Increased employee loyalty: Employers who invest in the wellbeing of their staff are more likely to retain their top talent. Offering a financial wellbeing programme can help create a sense of loyalty among employees who feel that their employer genuinely cares.
    • Positive workplace culture: A culture that promotes financial wellness fosters open communication and support among employees.
    • Attraction of top talent: Companies that offer comprehensive benefits packages, including financial wellbeing programmes, are more attractive to potential job seekers. This can help in recruiting the best talent.

    For further advice on supporting the financial wellbeing of your employees or to obtain a quote for a tailored financial wellbeing programme for your organisation, contact a member of our financial planning team by emailing financialplanning@pmm.co.uk or call 01254 679131. The results can be transformative and help to create a positive, healthy, more engaged and productive workforce for your business.

    Charity Commission releases guidance on how to manage financial difficulties due to cost of living pressures

    Posted on by Rebecca Campbell

    The Charity Commission have recently released guidance to recognise the difficulties charities are facing resulting from rapidly increasing costs, as well as direction on how to manage ongoing financial pressures.

    The guidance is aimed at all Trustees and reminds charities of their duties to provide effective financial stewardship and to confirm that any decisions made are in the best interests of the charity, whilst being legally sound. This includes finding a balance between reducing costs now to preserve funds to support beneficiaries in the future, whilst meeting the needs of the charity’s current beneficiaries. It is recommended in the guidance that open communication with beneficiaries, supporters, staff, and volunteers is paramount to find this balance.

    Assessing the risks that arise from making difficult decisions is also vital during periods of financial hardship. Trustees should consider the following:

    • Can the charity continue to safeguard beneficiaries, and protect them from harm, as it goes through a potential significant change?
    • Is it wise to sell investments and other assets to release funds for current expenditure? Sales may raise less money than could otherwise be secured in better economic conditions, however, it may be the best option available to meet your urgent needs. Whatever you decide to do, it is advisable to record clear reasons to support the decision made. You may also be eligible to borrow against your charity’s assets provided you follow the legal requirements.

    A large proportion of the guidance provides advice, considerations and practical steps which can be taken if a charity finds itself in serious financial difficulty. Including:

    • Minimising costs – stopping non-essential outgoings, reallocating employees, or even pausing some of the charity’s activities if needed.
    • Considering whether any of the charity’s funds can be released – this may involve seeking Charity Commission authority to change how restricted funds can be expended.
    • Conserving or improving sources of income – speaking to your funders / regular donors at an early stage is important to make them aware of your situation and plans. You may also consider raising extra funds through an emergency appeal or seek new or increased grants / loans at low or no interest.
    • Addressing financial difficulties in trading subsidiaries – where a non-charitable trading subsidiary is at risk of no longer being financially viable, charity trustees will need to consider if their charity can justify temporarily supporting the subsidiary.
    • Managing fuel costs – charities should ensure they are utilising Government energy bill relief schemes, and paying the correct rate of VAT on the fuel purchased.
    • Considering mergers or collaborative working – financial pressures may mean that charities consider merging or collaborating with one or more other charitable organisations. The Charity Commission have released separate guidance in this area.
    • Seeking external financial support and guidance – organisations such as National Council for Voluntary Organisations (NCVO), Institute of Fundraising and Charity Finance Group can provide help and support for charities struggling with the cost-of-living pressures.

    Get in touch

    If you are concerned about the effect of the cost-of-living crisis on your charity, or would like to discuss your particular situation in more detail, please get in touch with your usual adviser, or email enquiries@pmm.co.uk.

    Recession-proof your business: How to manage your business during a recession

    Posted on by Helen Buchan

    With forecasts predicting the UK is facing the longest recession on record, inflation continuing to rise and the cost of living crisis ever widening, as part of our recession resilience series, we consider further steps you can take to help manage your business effectively during a recession.

    Many businesses are still struggling to recover from the pandemic and this coupled with an uncertain road ahead, means it’s hard to predict how many will be strong enough to ride out these challenging times.

    Who is your customer?

    With a continuing drop in consumer spending because of the cost of living crisis, this is impacting a lot of businesses who are having to look to potentially change their focus in order to survive. It is for this reason that it’s vital to know your customer well, know what they are looking for and also how reliable they are. It may be sensible to mitigate risk in some areas by reducing your reliance on customers who potentially have a higher financial risk exposure.

    You could look to carry out regular credit checks to monitor customers’ performance and it may be worth considering who your ‘perfect’ customer is, in comparison to those which may be higher maintenance or providing less value because of reduced operating margins. Sales and procurement teams are often able to provide some useful market intelligence.

    Mitigate your risks

    A recession has the potential to trip some businesses up when it hits at the wrong point in their working capital cycle. Although this depends heavily on your company’s operating model, you could run the risk of being left with excess stock or work in progress that you are unable to realise value from.

    To mitigate a further risk, ensuring you have a range of suppliers who are providing any critical products and services can be a wise idea to help lessen the risk of an individual supplier failing.

    Keep on top of debt management

    One way you can protect your cashflow is to control your debt management and ensure any money that is owed to your business, is paid promptly. If interest rates are to rise and loans paid to the business become more expensive to service, it could be a possibility to consider restructuring debt finance to reduce cost in this area.

    Keep morale high

    During challenging times, it’s important for business owners to take a proactive approach to leadership and consider ways of motivating team members. By doing this, you are going to be in a better position to retain skilled people and get the most from their abilities. This was vital during the pandemic but is just as important now. You should also think about any additional support team members may need during an economic downturn to increase their morale and general wellbeing.

    Seek advice and plan ahead

    If you would like any further information or advice on how you can implement any of the above suggestions or help with planning a sensible approach tailored to your business, contact a member of our recession resilience team by calling 01254 679131 or email enquiries@pmm.co.uk.

    A comment to note that the article does not constitute personalised advice and that advice should be sought before taking any action.

    What can we expect from Liz Truss – the new prime minister?

    Posted on by Rebecca Campbell

    Following the Prime Minister’s announcement this morning to cap typical energy bills at £2,500 over the next two years, and a predicted Emergency Budget or ‘fiscal event’ in the very near future which is likely to focus on the cost-of-living crisis with measures to help households and businesses navigate the winter months, the new Chancellor, Kwasi Kwarteng, is set for a very busy few weeks ahead.

    Although there has been talk of the Prime Minister’s plans during her campaign trail, what can we expect as she gets started in her new role?

    What are Liz Truss’ views on tax policy?

    During the campaign trail, Liz Truss discussed making tax cuts of over £30bn. As always, campaign-trail promises don’t always bear fruit, but we can look at her voting record on tax for a view on what may be to come. For example, previous voting demonstrates that Liz Truss is firmly in favour of reducing corporation tax and has previously spoken about scrapping the planned increase on 1 April 2023.

    Changes to capital allowances are still not clear, especially whether the ‘super-deduction’ will continue – however, there has been talk of boosting support for businesses, so this may be an option given that a wide range of businesses are calling for long term stability in capital allowances to enable planning for future investments. We will hopefully gain clarity on this in the coming weeks.

    The Prime Minister has also previously promised to remove EU ‘red-tape’ as part of her long-term plan for economic growth, alongside an ‘overhaul’ of business rates, namely the IR35 rules. During the leadership campaign, Liz Truss announced a ‘complete review of the tax system’.

    Voting in favour of capping VAT rates has always been on Truss’ agenda – a reduction in VAT may be one of her first actions as Prime Minister.

    Increasing personal income tax allowances has also been discussed, and it is predicted that this may be implemented, alongside increases to the basic rate bands as part of a cost-of-living support package – a costly move for the government if it goes ahead. Truss has also repeatedly committed to reversing the April 2022 National Insurance Contributions (NICs) increase for individuals and employers and may come into force as early as November. However, whether this will include reviewing the NIC threshold increase which took effect from 6 July remains to be seen.

    Kwasi Kwarteng – the new Chancellor

    Kwasi Kwarteng is a strong ally of Truss and is broadly aligned with her views of windfall taxes, raising income tax thresholds and reductions in Capital Gains Tax. The new Chancellor is taking over the Treasury under enormous pressure, with further predicted tax cuts expected to intensify the holes in public finances.

    A cost-of-living support package is expected to be announced by the Chancellor in a matter of weeks – it will be interesting to hear the outcome.

    Energy price cap freeze

    As we all know, the ongoing energy crisis, in part driven by the Russian invasion of Ukraine, has had a huge impact on businesses on the UK. Far from over, short term solutions to the crisis are complex, as announced today, with the focus of the PM being mainly on households, with ‘equivalent support’ for businesses, charities and public sector bodies limited to six months, and ongoing help limited to ‘vulnerable industries’.  A review would decide which businesses should be targeted and is likely to be somewhat contentious.

    Emergency Budget – what can we expect?

    Rumours of an increase in the small business rate exemption to cover properties with a rateable value of up to £25,000 (therefore reducing business rates), and a possible extension of the existing 50% relief for retail, hospitality and leisure businesses may be considered in the Covid-style support package. A possible temporary reduction in the rate of VAT applied to hospitality and leisure sales may also be an option to support sectors most heavily affected by consumers cutting back on spending.

    Businesses can expect to benefit from the reversal of the April 2022 NIC increase and formal confirmation that corporation tax will not rise to 25% in April 2023 as previously announced by Truss, which may provide some reassurance for the longer term.

    In terms of help for households, the PM has previously stated that she would prefer to cut taxes than provide direct cash ‘hand-outs’. This may come in the form of cuts to VAT, with rumours suggesting the headline rate being reduced to as low as 15%.

    There has also been talk of changes to the transfer of personal allowances between married couples and civil partners. Currently, individuals are able to transfer up to £1,260 to their spouse/civil partner. Truss has proposed that the full allowance should be transferable to aid couples where one spouse is the sole earner.

    The next few weeks will be very interesting for many businesses, and individuals, and upcoming announcements may cause you to rethink your short- and medium-term plans. We will be sure to keep our clients and contacts updated as further detail from the government emerges.