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Could the workplace be the key to helping people to save?
I believe so, and it’s a core tool in assisting in building personal financial resiliance. It has been the bread of butter strategy for many credit unions in assisting members to save.
Michael Royce, savings policy lead at the Money and Pensions Service, talks about a Nation of Savers and workplace savings.
What are the benefits of workplace savings?
Workplace savings are becoming an increasingly critical tool for promoting financial wellbeing. These schemes allow employees to deposit funds into a savings account straight from their payroll. What makes this approach remarkable is the ability for employees to save before their earnings land in their personal bank accounts. This practice enables them to uphold a consistent savings routine, fortifying their financial resilience. Whether it’s for unexpected expenses, rainy days, or just a special treat, workplace savings offer a cushion for all.
Understanding MaPS and its "Nation of Savers" Vision
The Money and Pensions Service (MaPS) is an extension of the Department for Work and Pensions. Besides its consumer-oriented services, MaPS plays a vital role in orchestrating the UK Strategy for Financial Wellbeing, in cooperation with partners across sectors. A key component of this strategy is the “Nation of Savers” pillar. The ambitious goal? By 2030, to elevate the number of working-age folks with low-to-average incomes saving regularly by two million.
Workplace savings are at the heart of this initiative and a well trodden path for some 300+ credit union across the country who offer wokrplace saving to a variety of different business and institutions.
MaPS' Role in Refining Workplace Savings
Since 2019, MaPS, alongside BlackRock and JP Morgan via their foundations, has sponsored Nest Insight to evaluate different workplace savings models with employers. Recent research, especially around the ‘autosave’ method (where deductions are automatically made from payroll unless the employee opts out), has been particularly promising.
Research Highlights
Nest Insight has collaborated with giants like Cooperative Group, Bupa Care Services, Suez Waste & Recycling, Wagestream, and TransaveUK Credit Union since November 2021 to examine the autosave technique. Preliminary results are promising, showcasing autosave’s superiority in fostering workplace saving habits over traditional models. Furthermore, no adverse effects on debt servicing or retirement savings have been observed among participants.
Elevating Workplace Savings
While understanding the potential of autosave is vital, action is the real game-changer. In the upcoming year, MaPS, Nest Insight, and BlackRock aim to gather savings providers, government representatives, and employer groups. Their mission? To brainstorm methods to broaden workplace savings, with a spotlight on expanding autosave.
Drawing inspiration from global practices, the Secure 2.0 Act approved by the US Congress in 2022 offers a blueprint. This legislation streamlines the process for US companies wanting to introduce their teams to emergency workplace savings schemes.
Whats next?
If the topic of workplace savings interests you, especially within the framework of the UK’s Nation of Savers initiative, you won’t want to miss the upcoming insights from Michael Royce and MaPS. With shared vision and collective action, we can indeed transform into a nation of savers, fortified against financial uncertainties.
Don’t wait until it’s too late. Contact us for expert advice and support in developing your strategic plan today or direction and guidnece towards partnering with a local credit union. #UKSavingsweek #BusinessStrategy #LongTermSuccess.
Share this post with your board, business leaders, managers, and owners to ensure they understand why it’s important for the mutual sector to be leading the way in savings resilience for its members.
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