Mutuality has been brought into the digital age by Yorkshire Building Society which has created a new way for workers to save with fin-tech firm Salary Finance.
Their Salary Finance Internet Saver account aims to help the 16.8m working-age Brits identified by the Money Advice Service who have less than £100 in savings.*
The relationship combines Salary Finance’s innovative employee-benefit technology with the security and simplicity of a Yorkshire Building Society instant-access savings account.
It makes it easy for people to start a savings habit. Employees simply choose a regular amount of money to save and deposits are taken directly from their salary. This allows savings to be kept separate from day-to-day spending. However, money can still be accessed and withdrawn at any time, without penalty, if it’s needed.
Mike Regnier, Yorkshire Building Society Chief Executive, said:
“Starting, and keeping up, a regular savings habit is a big driver of financial wellbeing, especially for those that don’t have any form of meaningful savings already.
“Saving a small amount directly out of salary on a regular basis is a simple way to achieve this, as money is moved into savings before it reaches a bank account and could get caught up in everyday spending.
“As a modern mutual organisation, we’re really proud to be working with Salary Finance to offer this innovative way to save and to help employers provide support for their employees’ financial wellbeing. And because we’re a mutual, these employees will also become members of our society.”
At the time of launch, the Salary Finance Internet Saver paid 0.75% gross AER. Savers can vary the amount they save whenever they like and withdraw their money at any time without facing a penalty.
It has been welcomed by Consumer Champion and former Pensions Minister, Baroness Ros Altmann.
She said: “The UK is facing a savings crisis. In 2017 the ONS announced the UK savings ratio was at its lowest since 1963. The erosion of a savings habit is creating financial fragility across the UK workforce. This increases the risks of unexpected costs putting people in financial difficulty.
“Salary Finance and Yorkshire Building Society are launching an exciting new initiative that can enable employers to play a role in addressing these issues. In doing so employers can improve the financial confidence and resilience of workers across the UK.”
Salary Finance was co-founded by the former MD of Google UK & Ireland, Dan Cobley, former banking consultant, Asesh Sarkar, and social impact entrepreneur, Daniel Shakhani. They aim to help the UK’s workers become debt-free by offering a salary-based loan scheme – a more affordable alternative to high-interest pay-day lenders – and now, they’re helping people to save for futures with Yorkshire Building Society.
Asesh Sarkar, Chief Executive of Salary Finance, said: “At Salary Finance, we understand the crucial role finances play in our health and happiness. Since launching we have proved that finance can be delivered in a socially progressive way.”
*Statistics taken from Millions at risk with savings of £100 or less, Money Advice Service, Andy Webb, https://www.moneyadviceservice.org.uk/blog/millions-at-risk-with-savings-of-100-or-less