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Mid-year 'cost of living' payment

Sophie

Hi everyone, 

I was wondering what others thoughts were on paying a one off payment mid-year to help with the rise in the cost of living.

Also if and what other companies were doing to help with the rise of cost of living.

Thanks

  • in reply to Emma

    Yes, Emma there are HMRC issues to consider. 

    This employer includes hardship loans in its approach to employee financial wellbeing and this from a recent LWF event might also be useful.

    The CIPD reward management survey finds that 20% of employers surveyed offer hardship loans to some or all staff, 16% offer earned pay access (employees can access their earned wage before their regular pay day), and 5% allow staff to set their own pay date (staff can choose how often they are paid, for instance weekly rather than monthly). 

  • There are a number of large employers offering employees a one off amount to support with the cost of living crisis.  I was wondering what smaller employers or charities were thinking about this, and whether they had any plans to offer such a payment or what other support was being put in place.

  • in reply to Rachel
    Hi - you started a new thread but I've moved you rpost into the pre-exisiting (and busy) discussion. Hope you don't mind.

    With another hat on I had a call today with the Chief Officer of our area Citizens Advice team. Grim. I think employers need to be preparing for increasing stress on their employees in the autumn.
  • This is a great post and we are also thinking one off payment plus 1 or 2% (we gave 2.8% and more in April's merit increase) and then a further merit increase again in April 23. I am finding a lot of conflicting information for example some fellow colleagues giving on or around CPI, yet median anticipated pay increases in the private sector are around 4% (CIPD and Chemical Industry benchmark).
  • in reply to Rachel

    The CIPD’s Summer 2022 Labour Market Outlook found a difference by employer size and sector in terms of cost-of-living payments.

    Overall, in response to the jump in the cost-of-living, 15% of employer have awarded, or plan to award, a cash lump sum (such as a bonus, stipend, allowance, etc) to some or all their workers to help offset price rises. This is in addition to any salary increases given or planned this year.

    By sector, 18% of companies in the private sector have done this or are planning to do this compared with 8% of employers in the public sector and 11% of charities in the voluntary sector.

    Large employers (17%) are more likely to have done this (or have plans to do this) then small- and medium-sized employers (13%). Similarly, large firms (21%) in the private sector are more likely to do this than small- and medium-sized businesses (14%).

    For more information overall, see this CIPD blog

  • in reply to Viv
    If you just look at those firms that plan to increase pay in the next 12 months and exclude those that plan to freeze or cut it, then the median CIPD pay forecast in the private sector jumps from 4% to 5%, while the mean forecast goes from 4.24% to 5.53%. Half of all private sector pay forecasts are for a rise of 4% or more, this proportion is even higher in such sectors as business services.
  • in reply to Charles
    That's a better way to look at it, thanks Charles
  • in reply to Charles
    It is surprising to read that there are organisation planning to cut salaries in the next 12 months. Inflation is not only hitting individuals particuarly hard then, organisations are struggling as well which is bad news to the economy. Luckily unemployment is still at hisotric low-level so far.
  • in reply to Adham
    Back in June, few employers thought they would need to cut or freeze pay. Last time we had a recession, many organisations were able to freeze or cut pay temporarily because inflation was negative. Inflation isn't negative at the moment.
  • Hi Sophie,
    In our company, we made a higher than usual pay increase at the end of last year in anticipation of it being a difficult year. We've also just made a one-off payment to all staff of the same lump sum across the board.
    Another thing we've done is to do really clear signposting on our internal homepage to all the financial assistance available from the government so people can find out what's relevant to them.
    We've been broadcasting financial wellbeing webinars in our meeting room for people to attend if they'd like to, and intend to carry on doing this.
    Laura