Saving through payroll
With around a third of the UK population carrying significant personal debt and financial stress causing the loss of 17.5 million UK working hours each year and with its associated impact upon mental illness – employers are beginning to care more and more about the financial well-being of their staff
Most employers now are seeing payroll savings vehicles as just another essential offering which is provided to employees as part of a portfolio of benefits and deductions, such as an occupational pension.
What are the benefits of saving through payroll?
By offering a means to save through payroll, you are demonstrating to your employees that you care about their financial well-being.
According to research conducted by the CIPP during August 2015, 55% of employees aged 16-65 would like their employer to offer saving and borrowing through payroll. By offering this as part of your overall benefit and reward package, your organisation will:
- Become an employer of choice, offering benefits which have real value to your employees. This will assist in your overall recruitment and retention strategy
- Demonstrate that it values your employee's wellbeing and therefore increase morale and productivity amongst your workforce
- Reduce absenteeism related to financial stress, which will reduce your overall sickness absence and ultimately improve your bottom line
What platforms are available?
There are many ways to set up a payroll savings scheme in your workplace for employees to use.
- Credit unions are the most common. By investing in a credit union employees have the ability to not only save through payroll but also borrow money at a competitive rate, which they may not otherwise have access to. Credit unions are generally more open to accepting borrowers, meaning those with bad credit ratings may still be eligible for a loan. As an employer, you will not know whether your employee is saving or borrowing
- A financial wellbeing platform can help to save for any unforeseen expenditure in much the same way as a credit union, helping an employee save disposable income and ensuring they stick to a budget to get the most from their pay
There are other platforms and options available.