Helping minimum-wage workers avoid debt: A smarter benefits approach
With essentials like food, rent, fuel and childcare rising faster than wages, more minimum-wage workers are turning to overdrafts, credit cards and high-cost borrowing to get by. For employers, that pressure shows up quickly in stress, absence, lower productivity and higher employee turnover. The opportunity is to act earlier: shift from reactive debt support to proactive financial wellbeing, helping lower-paid employees build resilience through everyday savings. In this blog, we unpack why debt risk is rising and how benefits like cashback cards and employee discount schemes can stretch pay further, helping workers avoid debt while strengthening retention and engagement.
In a hurry? Here are the top three takeaways for our blog on helping to prevent your minimum wage workers from going into debt.
1. Prevention beats crisis support (and delivers ROI): Don’t wait until someone is already in a debt spiral. Build financial resilience early through benefits that reduce day-to-day pressure, thereby lowering stress-related absence and improving retention.
2. Target essentials, not nice-to-haves: Debt is being driven mainly by rising costs of basics (food, fuel, rent, childcare, travel) and, for some roles, income volatility, so the most valuable support is whatever helps people save on what they already have to buy.
3. Make savings automatic, inclusive, and easy to access: Everyday savings mechanisms (cashback cards and employee discount schemes) can help people build a buffer through small, regular wins (e.g., £10–£20/week), but only if the tools are simple to use, clearly communicated, and positioned as a standard part of the benefits package accessible to everyone.
Got time to stick around? Let's dive a little deeper.
Why is debt a growing risk for minimum-wage workers?
For many, the current economic climate looks bleak. Debt is a growing risk for low-paid workers because the cost of living is rising faster than their earnings, and has been doing so since 2022.
As a result, employers are increasingly seeking ways to provide meaningful cost-of-living support for workers.
The difficulties of saving when struggling to make ends meet
In our recent blog post on debt awareness, we revealed that over half of people of working age in the UK live in households with less than 3 months’ wages saved. Quite simply, many don’t have the surplus earnings left at the end of the month to prioritise setting money aside for savings or investments, or even something to fall back on when needed.
When low income meets high inflation, we’re left with a gap between rising living costs and minimal wage growth. This results in a worrying number of people who are struggling to pay for the essentials they genuinely need to get by.
Moving beyond crisis-led employee debt support to proactive prevention
It’s time to shift your focus from crisis management to proactive support and prevention through strategic employee benefits that genuinely help minimum-wage workers avoid debt and enhance their financial wellbeing.
Minimum-wage workers are increasingly vulnerable to debt due to rising living costs, making employer-led financial wellbeing support that delivers real value more critical than ever.
What are the hidden causes of debt for minimum-wage workers?
It’s a common misconception that people primarily get into debt because they’re living beyond their means, splurging on holidays they can’t afford or treating themselves to luxuries like new cars. The truth is that the hidden causes of debt for minimum-wage workers are more likely to be the growing costs of essentials like food, fuel, rent, childcare and travel.
The issue of income volatility
For employees whose incomes fluctuate, such as those on zero-hours contracts or shift workers, there is the challenge of income volatility, which makes it tricky to predict whether they'll be able to cover their bills.
Zero-hours contracts form part of the Employment Rights Act reforms outlined in the 2025 Autumn Budget. From April 2026, employers will need to offer guaranteed hours and shift notice, with additional protections coming into effect during 2027.
The reforms will give employees more consistency, but that doesn’t automatically translate to more income.
As outlined in our Debt Awareness Week blog post, on average, each UK adult has over £4,000 worth of unsecured debt. So, for many, especially manufacturing and frontline workers, the idea of a rainy-day fund or saving buffer is beyond reach, with any spare money more likely to go towards paying off debts.
How employees in debt can harm your business
When employees don’t have a savings pot to fall back on, or only manage to repay credit interest – barely making a dent in their repayments – they risk falling into a risky cycle of using credit, often high interest, for essential spending, pushing people further and further into debt. With limited access to affordable financial tools, it can feel impossible to escape from this debt trap.
The impact on stress levels and mental health is huge, and from a business perspective, you’ll likely see lower productivity and a high employee turnover as a result.
In our blog, ‘Creating a Brighter Tomorrow... Financial Wellbeing and Mental Wealth’, we explore financial stress in greater detail.
Why is preventing debt better than managing it?
Debt can be harder to escape from than providing employees with the tools needed to prevent them from reaching debt in the first place, reducing the risk of financial stress and excess absenteeism.
If your workforce isn't preoccupied with tackling worrying debt, they’ll be less stressed about their finances, which will make them physically and mentally healthier. When your employees are less stressed, you'll see absenteeism reduce and employee retention improve, which is why preventing debt actually delivers a return on investment.
Minimum wage financial wellbeing is a business priority
As explored in our Debt Awareness Week blog post, there are many ways you can provide debt support, and from your employees’ perspectives, this can mean the difference between spiralling and thriving.
However, it’s far more cost-effective to intervene early via employee benefits than it is to wait until you have a crisis on your hands. We all know how costly it is to hire temp staff to make up for rising rates of absenteeism, and to replace those who quit due to financial burnout or in search of a better financial package.
The impact of good financial wellbeing
If your employees feel cared for by you, then their loyalty will be to you, leading to deeper engagement and improved performance. Employees are willing to put in more effort if they feel their manager values them – and, be warned, the opposite of this is also true.
If you address financial stress at its source, you can expect a measurable reduction in stress-related absenteeism and improved workforce stability. Workers with good financial wellbeing are more engaged and less likely to leave for marginal pay rises elsewhere, lowering your recruitment costs as a result.
What are the practical ways employers can help minimum-wage workers avoid debt?
There are many ways employers can help minimum-wage workers avoid debt, including reducing the cost of everyday living, helping them regularly save money, and providing educational tools to manage their finances better.
In this section, we’ll explore two of the most practical ways employers can help low-paid workers avoid debt and build a savings buffer, such as incorporating cashback cards and discount schemes into employee benefits packages.
Reduce everyday living costs at the source
We know that debt isn’t primarily due to excessive spending. The problem is the rising cost of food, fuel, utilities, and household essentials, none of which your workers can go without.
Shopping around for the best deals helps, as does switching providers, but giving employees a consistent, inclusive and flexible way to save money every day drives real value. 6.5% off the cost of the weekly shop can add up to hundreds of pounds by the end of the year.
The effect of saving £10-£20 a week
An accessible emergency savings fund of £1,000 would significantly reduce the number of workers at risk of debt. Yet people on low-to-moderate incomes are among the least likely to have this amount in savings (StepChange). The key here? Start small.
Small weekly savings of £10-£20 soon build up to create a financial buffer that breaks the cycle of high-interest borrowing. Even a modest savings pot of £200- £500 significantly reduces the risk of financial hardship compared to having no savings at all, and can be built up in just a few months.
It all comes down to better habits and behaviours. Your employees need to buy food for the week, and if they can save £6.50 by paying with an eVoucher purchased through our Marketplace, they can set that £6.50 aside.
Yes, it’s small, but it’s just one area of essential spending, and the savings really do add up.
Without savings, an unexpected £100 expense often ends up on a credit card or a payday loan. Thanks to eye-wateringly high interest rates, that £100 can quickly become £150… or more. Saving just £10 a week builds a £520 annual pot, allowing your employees to pay for emergencies in cash and avoid these compounding interest costs.
Practical financial benefits for low-income workers
It’s easy to theorise how your employees can build up their savings by putting aside ‘just £10’ per week, but what if this isn’t feasible? It's this scenario where discounts and cashback come into play.
These simple, accessible methods empower your workforce to save on everyday spending, putting money back into their pockets to either pay off existing debt or build a savings pot.
Cashback sounds like an incentive, but as Kirsty Goes shares in our latest guide, with the Pluxee Card, it really is “free money.” It’s not about buying something to claim cashback; it's about earning cashback on what you’re already spending by choosing to shop with a retailer on the scheme.
Hero solution #1: Cashback cards for employees that stretch wages further
Why is a cashback card for employees a hero solution? They deliver real value by returning a portion of employees’ spending to their balances as cashback. The pot builds up, reducing the cost of their next purchase or empowering them to keep growing funds for future use.
What is a cashback card for employees?
A cashback card is a digital prepaid Visa card that offers your employees varying levels of cashback based on where they spend it. Imagine how quickly that cashback could scale up if they used it for every purchase – online and in-store, including the weekly food shop.
Managed via a user-friendly app and stored in an Apple or Google Wallet, the Pluxee Card is a great example of this. Giving your employees up to 15% cashback at over 80 retailers means they can shop for their daily essentials and build savings at the same time.
For a deep dive into how it all works, take a look at our ultimate guide to the Pluxee Card.
How cashback cards for employees help prevent debt
Employees who successfully build up a savings buffer using a cashback card are much less likely to lean on credit cards and overdrafts to help them survive a period of financial hardship. The bigger this savings pot grows, the more confident they’ll feel about their personal financial security.
More importantly, this controlled, purposeful spending means they won’t be incurring interest, so debt is far less likely to build up. It’s also a brilliant way to encourage budgeting, which can only improve their financial health.
Offering your employees cashback cards is one of the best ways you can help their wages go further without increasing payroll tax or overheads. In our ultimate guide, you can find out how the Pluxee Card can help stop your employees from getting into debt in the first place.
Cashback cards help minimum-wage workers avoid debt by lowering essential costs before financial pressure turns into borrowing.
Hero Solution #2: Employee Discount Schemes that cut monthly costs
Employee discount schemes also deserve hero status since they help employees spend less on the things they need. Rather than reducing the price at the checkout, employees can buy a discounted eVoucher. The price at the till is the same, but the voucher they bought to cover the shop cost them less than the value of their purchase.
Why discounts matter more for low-income workers
Low-income workers are the most likely to benefit from smaller discounts because they have a bigger impact on their total savings.
To use a tangible example, if your employee spends £100 per week on their food shopping and gets a 5% discount of £5, that adds up to around £20 per month. That’s £20 per month in potential savings your employee didn't have access to. Add that up over the course of the year? You’re looking at around £260.
£260 may seem insignificant to higher earners, but for a minimum-wage employee, this can mean the difference between paying off an unexpected bill as soon as it lands or resorting to a credit card and sucking up the high interest.
What to look for in an employee discount scheme
Employee discount schemes must be relevant and realistic, delivering savings where your lower-paid workers are actually spending.
Discount schemes for employees should also be accessible, ideally via a smartphone app that workers can use even when not at a desk. Make it easy. Keep it simple. Accessibility is key!
Employee discount schemes act as a financial enabler, helping minimum-wage workers reduce costs without taking on debt. If you want to jump on the topic of discount schemes and go deep, this blog post is essential reading, so don’t skip it.
How can employees combine cashback cards and discounts for maximum impact?
Combining cashback cards and discounts is an effective way to build long-term financial resilience and wellbeing, supporting both short-term and long-term saving and spending habits.
When your employees have access to discounts and cashback, they can compare retailers and offers, switching between them as needed. If a retailer offers the same level of cashback as they do a discount, it comes down to an employee's preference: would they rather save upfront, or are they more motivated by watching their cashback earnings grow?
How does financial wellbeing support and build a fairer workplace?
Offering financial wellbeing support to everyone in your business creates a culture of inclusion and fairness. By ensuring you give the same level of support to everyone, you’ll successfully reach the most vulnerable in your workforce, without attaching the unwanted stigma many associate with struggling.
Aligning the benefits you offer with real employee needs shows you’re aware of the issues your workforce faces and genuinely want to help. In terms of your brand reputation, you can feel confident that you’ve positioned yourself as the ethical employer of choice in a competitive labour market.
Getting started: 4 steps for employers
Ready to support your low-paid workers in escaping the debt trap? Here’s how to implement effective employee debt support in four simple steps.
- Assess: Survey your workforce to find the biggest pain points in terms of financial pressure.
- Prioritise: Implement benefits that offer immediate, tangible savings on essentials, not just luxuries.
- Communicate: Ensure employees know how to access and use the tools to get the most out of them.
- Position: Frame the benefits as a standard part of the package, and not as a charity initiative.
Helping minimum-wage workers avoid debt starts with smarter benefits
Debt is not a personal failure, it’s a failure of the system. The gap between the minimum wage and the rising cost of everyday necessities most often causes debt. You can make a measurable difference to the lives of low-paid workers. Tools like cashback cards and discount schemes are practical, scalable solutions that can bridge the gap between wages and the cost of living.
Helping minimum-wage workers avoid debt isn’t about pay rises alone, it’s about giving people smarter ways to make their money go further.
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