Co-Op and Next among firms launching workplace savings scheme
A new employer-led coalition designed to help workers build emergency savings and boost financial resilience has launched, urging employees to save regularly in order to avoid unexpected financial storms.
The National Coalition for Workplace Savings was launched on Tuesday, representing firms across a range of sectors including retail, hospitality and transport, all urging employees to save through employer-backed schemes.
Collectively, it employs roughly 400,000 employees, with members such as Co-Op, Next, Travelodge, Mitie and the Department for Environment, Food and Rural Affairs (Defra).
The initiative, which was generated through the government’s financial inclusion strategy, comes amid a growing recognition that large numbers of UK households lack a needed financial buffer for unexpected costs.
Lacking an emergency fund leaves them at risk of becoming vulnerable to financial shocks and have to potentially rely on high-cost borrowing.
The coalition aims to prevent this by working to increase the number of UK employees accessing and benefitting from workplace savings schemes, by encouraging heightened participation and engagement.
The savings crisis
Workplace savings schemes will allow employees to build up an amount for savings pots which can be used for unexpected bills and prevent the accumulation of debt.
Employees using such schemes can withdraw the cash at any point without the fear of a penalty.
Away from a lack of emergency funds, industry figures are also raising the alarm that Brits’ lack of savings is hurtling them towards a retirement crisis, with many failing to put enough away for later life.
Becky O’Connor, director of public affairs at Pension Bee, said: For too long, employer involvement in helping employees to improve their finances has been a missing link.
“The same behavioural principle that transformed pension saving through auto enrolment, making saving the default rather than a decision people have to actively make, can work just as well for short-term savings.
“Employer-led savings schemes bring the decisions to where people are and make it easy for people to engage, creating a culture that normalises saving… exactly the kind of initiative that can lead to an improved outlook for household resilience, both short and long term.”