Payroll industry announces they will offer credit union loan repayments for free
28 January 2014
The Chartered Institute of Payroll Professionals (CIPP) is delighted to announce that many of the UK’s payroll outsourcers have agreed, as part of their corporate social responsibility, not to charge their customers for the processing of Credit Union loan repayments, allowing organisations the ability to offer this facility to their staff if they have outsourced their payroll.
The CIPP will be working with payroll professionals and payroll software providers to ensure there are minimum administrative burdens and / or costs associated with the scheme.
Research has shown that employees are less effective in the workplace and have a higher level of absence when they are pre-occupied with debt worries.
Lindsay Melvin, CEO of the CIPP said “Our hope is that all employers and payroll providers will collectively support employees in managing their debt by not charging for processing Credit Union loans through payroll. It would be good if employers were proactive in communicating to staff the advantages of going to a Credit Union as a viable alternative to a payday loan provider, with a valuable advantage of having a free mechanism to repay their loans and saving to cope with emergencies. This act of generosity provided by many in the payroll industry will, hopefully, galvanise all businesses to review their current policies relating to employee debt.
“The delinquency rate on loans repaid through payroll is less than 1% whereas through other repayment methods it is nearer 8%. The CIPP hopes that this initiative by many in the payroll industry will encourage businesses that process their own payroll to also provide this service free of charge. There is no doubt that personal debt worries can cause severe anxiety and depression and that this in turn manifests itself into increase in days off sick and reduced productivity so it is vital that employers recognise this and support any initiative to mitigate this.”
Organisations signed up to support the initiative include:
- Bond Payroll Services
- Ceridian UK Ltd
- Frontier Software Plc
- Peninsula Business Services Ltd
With further companies to be announced shortly.
For more information on the CIPP then please visit the website.