How can banks help amid the cost-of-living crisis?
The cost-of-living crisis is having widespread implications as prices continue to rise at the fastest rate for 40 years. UK inflation rose to 9.4% in June 2022, the ninth consecutive month with an increase. Many day-to-day items are becoming more expensive, particularly fuel and food.
What can banks do to help those who are feeling the impact of the cost-of-living crisis?
Experts in the financial sector are well placed to offer advice to those who are facing money struggles. From helpful messaging to practical tips, there are many things the banking sector can do to help.
There is certainly a need for expert advice. An Office for National Statistics study into the impact of the increased cost of living found that more than eight in 10 adults (83%) in Great Britain reported an increase in their cost of living in March 2022.
As consumers try to manage increased costs across fuel, energy, food, transport and other areas, here are some of the ways financial institutions are offering help and advice.
Sharing useful information
HSBC has created a mini-website giving extensive advice on the cost-of-living crisis.
They give practical tips on ways to save, as well as helping people consider the stresses associated with rising living costs.
Articles cover multiple topics, such as how to stop overspending. There are also many tips including where to get support.
Offering the chance to talk through worries
NatWest is encouraging customers who are worried about their finances to get in touch to discuss their concerns.
They are telling customers to begin their message with the words “struggling financially” so they can give them the right support – whether they are getting in touch via their app, website, or online banking.
They also list and link to organisations and charities that offer free, independent financial advice.
Support for banking employees
Some banks are also providing cost of living support to their own staff. The rationale being that providing help to their own employees means that they are better equipped to help others.
Lloyds Bank are giving employees a £1,000 one-off payment to help with cost of living increases. More than 64,000 staff will receive the payment, which is due to be made in August.
Barclays has announced it will give 35,000 UK employees a £1,200 pay rise to help them deal with the cost of living crisis. The pay rise will go to branch and junior support staff, and will come into effect from August.
Helping their customers manage debt is another key role banks are currently playing.
Many banks are also providing links to organisations that can provide further support, such as debt charities like StepChange, and Citizens Advice.
Citizens Advice give extensive advice on their website, ranging from getting help with essential costs to outlining what help is available from local councils and government.
By helping customers get in touch with these further sources for advice, banks are allowing expertise to be shared, and giving customers another opportunity to get much-needed support.
Making sure messaging is clear and caring
At a time like this, customers need to know that they are not alone in having financial struggles. They need to know that support is there if they need it.
Messaging is key to this. Consumers respond to simple messaging that is easy to understand. They require clear instructions, for example, how to contact someone for advice or fill in a form.
Under times of stress, we don’t function as well and financial struggles are a huge stressor. The clearer the message and the simpler the instructions, the better.
In all these ways and more, financial institutions are offering much-needed support to those impacted by the cost of living crisis. However, as financial difficulties continue, there is still more to do.