Boosting financial resilience through workplace savings

Workplace savings are growing in popularity and their benefits for employees include less problem debt, better mental health, higher productivity; and more money saved for retirement.

Article first published in Society Matters magazine (December 2023)

Darcie Smith, BSAWorkplace savings are growing in popularity and their benefits for employees include less problem debt, better mental health, higher productivity; and more money saved for retirement¹.

As part of its UK Strategy for Financial Wellbeing, MaPS noted that there are many benefits in boosting financial resilience, and that the workplace can be a critical delivery channel to improve individual’s financial wellbeing. This resonates with employees too - the BSA found that 62% of survey  respondents thought that employers should care about their employee’s financial wellbeing.² 

In November 2023, the BSA hosted a workshop for members alongside Capital Credit Union and the Money and  Pensions Service (MaPS) to delve into the research supporting workplace savings, the benefits and barriers of offering them, and on the operational processes for providers considering setting up workplace savings for their local employers.

Various providers entering the workplace with financial education, wellbeing and salary advance service offers are growing. The provision of workplace savings schemes is an increasingly competitive market, and 34% of employers offer or plan to offer pay-as-you-earn savings scheme in the next two years.³  Exciting new research  from Nest Insight has gone even further and discovered the benefits of offering an opt-out service, finding in their recent new worker trial that around half (46%) of new workers save under the trial’s opt out approach, and opt-out  auto savers build higher balances on average compares to opt-in. 4

Marlene Shiels, CEO of Capital Credit Union, a leading provider of workplace savings for local employers, provides some insight into the why and how of this type of savings product 

Why are workplace savings so important?

We are all aware of the statistics in the UK right  now in relation to the lack of financial resilience faced by many. 17.4m people with less than £300 in savings, 20.3m people relying on benefits to make ends meet – many of  whom are in work, but still don’t have financial security. 

Workplace savings help people to build financial security,  and are a nest egg for unexpected emergencies, a  way to plan for future purchases, a financial security blanket, and peace of mind.

Workplace savings are also good for employers.

Investing in your greatest asset, by allowing and encouraging workplace savings, helps staff to build financial  resilience. It also helps staff to be more productive, as research has proven that staff who are dealing with a financial crisis are less productive at work. Sick days due to financial crisis are also reduced. A win-win for staff and employers.

Capital Credit Union has been offering payroll savings since its inception over 34 years ago.

Now working with over 85 employers, who all see the benefits of supporting their workforce by providing free  access to payroll savings, the credit union also provides access to low-cost borrowing, mortgages and a range of other products.

Payroll savings must be a true partnership to have impact. It takes effort from both the employer and the financial  institution. But the rewards are significant for the employee who is building financial security, the financial institution is building its membership, and the employer maintains or improves productivity. 

Capital Credit Union  has built its business model around payroll savings. It makes sense for the organisation on several levels; it also allows the credit union to build a robust financial inclusion agenda for those members with fewer financial choices.

Find out more: If you are interested in learning more about offering workplace savings, please contact andrew.gall@bsa.org.uk

¹ Nest Insight, Building a nation of savers via the workplace, 2023
² BSA, Boosting financial resilience and wellbeing through workplace
saving, 2022.
³ REBA, Financial Wellbeing Research, 2023.
4 Nest Insight, Opt-out autosave at work, figures 4 and 6, 2023.