Stronger savings for hundreds of thousands of workers
Workers can join schemes where a proportion of their salary, chosen by them, automatically goes into their own savings pot.
- Major employers like BT, M&S, Veolia and Home Bargains have joined the government-backed National Coalition of Workplace Savings to offer new savings schemes to their employees.
- This is part of the Government’s plan to help people build their savings and financial resilience, giving them breathing space when they need it most.
Over half a million more workers across the UK will have the opportunity to build their savings more easily and strengthen their financial resilience.
Employees who have access to employer savings schemes can decide to automatically put a proportion of their pay into savings. Their savings build up over time and can be easily accessed at any point without charge.
BT, Veolia, M&S and Home Bargains join other employers including Co-op, SUEZ, Bupa, OCS, Mitie, Greene King, Burger King UK and Travelodge who are members of the government-backed National Coalition of Workplace Savings, where members agree to offer their employees a workplace payroll savings arrangement and encourage them to participate.
Tesco is also working closely with the Coalition and has now launched a payroll savings scheme.
For employees who use the scheme, it provides a quick and easy way for setting aside a bit of money regularly that can be spent when they need it most, giving them a safety net.
This is part of the plan to give families a bit of breathing space, and it was the Government’s Financial Inclusion Strategy that initiated the coalition, bringing employers together along with a landmark regulatory statement from the Financial Conduct Authority to help employers understand how to offer these schemes safely.
This follows other action to help people who are struggling, including protecting people from problem debt by regulating Buy-Now Pay-Later products, supporting those experiencing homelessness to open a bank account through an expanded partnership between banks and charities, and developing a new approach to credit file reporting, so that domestic abuse survivors who have been coerced into taking out debt are able to rebuild their creditworthiness and financial independence.
The Government is also committing to remove the barriers holding back employers from implementing payroll savings. This includes working with businesses to develop a factsheet making clear to employers how savings schemes should operate within National Minimum Wage rules, so that employers can offer these schemes with confidence and their workers can benefit.