Workplace Savings Scheme Benefits
Saving & Borrowing In HarmonyThe Workplace Savings Scheme From Wave Community Bank
Research shows the positive impact of these schemes
The importance of addressing the financial well-being of workforces is gaining increasing recognition amongst employers. A key part of this strategy is the fostering of a savings habit that helps build employee’s financial resilience. Yet, while the rationale to harness automated payroll deduction as a mechanism for workers to develop regular savings is clear, there appears to be little research or evidence on the topic. Until now.
The Financial Inclusion Centre has recently published its new Interim Report ‘Getting Workforces Saving’ that looks to address this lack of research – part of its 18 month study that is being funded by the Money and Pension Service and delivered in partnership with Leeds Credit Union together with employers; NHS York and Leeds City Council.
This important research will evaluate how effective payroll deduction schemes with credit unions are at encouraging greater levels of savings and positive financial behaviours in comparison to other saving approaches.
Key Findings:
The extensive baseline Financial Well-being survey has already been conducted with 1,628 staff across the two participating employers highlighting a number of important findings:
There is a positive relationship between credit union membership within workforces and more frequent and persistent (or disciplined) saving habits compared to their non-credit union member colleagues.
Payroll deduction schemes with credit unions appear almost universally popular amongst existing users – 96% stated that they would recommend this method to their co-workers.
Ease and simplicity is the principal driver for participating in a payroll deduction scheme – 79% stated it was the main reason for saving via this method with the credit union.
There appears to be a distinct lack of awareness about opportunity to save via payroll deduction – 62% of those not already saving via payroll were unaware they could make regular savings via their employer in this way.
There is significant interest in saving via payroll amongst workforces – 53% of those without a payroll deduction showed interest in saving via this method.
Finally, the research also highlights the significant financial struggles facing these workforces and the detrimental bearing this is having on their lives and their work.
While at this stage of the research there is no definitive link to the wider beneficial impact of saving via payroll deduction on workforces, credit union members using automated payroll deduction do appear less anxious and less impacted on their health/well-being, family relationships and their work compared to their non-member colleagues.
Source: Getting Workforces Saving: Payroll Schemes with Credit Unions. Scene setting report – October 2019
There is a positive relationship between credit union membership within workforces and more frequent and persistent (or disciplined) saving habits compared to their non-credit union member colleagues.
Payroll deduction schemes with credit unions appear almost universally popular amongst existing users – 96% stated that they would recommend this method to their co-workers.
Ease and simplicity is the principal driver for participating in a payroll deduction scheme – 79% stated it was the main reason for saving via this method with the credit union.
There appears to be a distinct lack of awareness about opportunity to save via payroll deduction – 62% of those not already saving via payroll were unaware they could make regular savings via their employer in this way.
There is significant interest in saving via payroll amongst workforces – 53% of those without a payroll deduction showed interest in saving via this method.
Finally, the research also highlights the significant financial struggles facing these workforces and the detrimental bearing this is having on their lives and their work.
While at this stage of the research there is no definitive link to the wider beneficial impact of saving via payroll deduction on workforces, credit union members using automated payroll deduction do appear less anxious and less impacted on their health/well-being, family relationships and their work compared to their non-member colleagues.
Source: Getting Workforces Saving: Payroll Schemes with Credit Unions. Scene setting report – October 2019
