Need to know:
- There are many different workplace savings vehicles available for employers to offer staff.
- The key factors employees want are that schemes are simple and flexible.
- Workplace savings schemes need to comply with current rules and legislation.
The Financial Conduct Authority’s (FCA) Financial lives survey, published in June 2025, suggests a quarter of UK adults have low levels of financial resilience. The average savings pot is between £5,000 and £6,000, and one in 10 have no savings at all. This is a serious issue; not just for society but for employers, which face the prospect of stressed staff who are more likely to leave for a better-paid role.
Employers, though, can help by encouraging people to save and providing the means to do so. Research conducted in February 2025 by Opinium on behalf of Zest and Epassi UK found three-quarters (74%) of employees want more financial support from their employer, and 20% rate a workplace savings scheme as one of their most sought-after benefits.
Workplace savings products
The concept of workplace savings is now well established, following the introduction of pensions auto-enrolment in 2013, and there are various ways in which employers can offer this with savings products. Jason Cannon, corporate consulting team leader at Gallagher, says: “Options include payroll-linked individual savings accounts (Isas), lifetime Isas and sidecar savings schemes that build short-term buffers alongside retirement pots. Some are also exploring sharesave plans or even student loan repayment support.”
Payroll schemes, where an amount from an employee’s net salary is paid from the employer into a savings account each month, draws on the auto-enrolment model, albeit without any employer contribution or tax benefits. Josh Hayes, principal consultant for pensions and financial wellbeing at Howden, says: “Payroll functionality encourages the pay-yourself-first concept. Essentially, it’s about prioritising future goals over immediate wants.”
Simple options
These are not the only option, though. James Gozney, founder and chief executive officer (CEO) of financial wellbeing platform Aslan, says: “Some payroll providers offer simple voluntary Christmas savings schemes for clients to offer employees. Enrolment is typically in December of the prior year, and providers simply hold back some money each month, paying the savings out in November payroll, in time for Christmas.”
Sharesave, or save-as-you-earn (SAYE), schemes also provide a means of allowing employees to build a pot of money, which can then be used to purchase shares in the employer at a reduced rate. Jonathan Watts-Lay, director of Wealth at Work, says: “Employees are invited to save between £5 and £500 per month over a three or five-year period.
“There is no investment risk involved for the employee as at the end of the period if the share price has fallen below the option price, the employee can receive all their savings back. If the share price is higher, the employee will be able to buy the shares below their market value, enabling them to generate a return on their money.”
Whatever the set-up, employees are looking for schemes that are simple, flexible and trustworthy, says Katharine Photiou, managing director, workplace savings, at Legal and General. “Our own research has found that the most valued features are a trusted provider, clear low fees, straightforward investments and 24/7 digital access, ideally through an app,” she says. “Employees also want choice, whether that’s salary deduction, ethical or Shariah-compliant funds, or the ability to keep saving even if they change jobs.”
Legislation compliant
The FCA recently sought to provide clarify and reassurance that workplace savings schemes can be successfully set up and implemented to comply with current rules and legislation. But Mark Hathaway, pensions and workplace savings team leader at Lockton, believes it will take introducing such arrangements on an opt-out basis to have a real impact.
“We know that opt-out rates resulting from automatic-enrolment into pensions have been low, typically around 10%,” he says. “While those choosing to opt out from participation in any automatic-enrolment-style sidecar savings vehicle offered by an employer will, of course, be higher, we believe participation will still be positive and likely to surpass expectations.”
Employers, too, stand to benefit. “Reducing financial stress helps improve wellbeing, loyalty and retention, while also making it easier to attract new talent,” says Photiou. “Commercially, employers may see increased productivity and resilience among colleagues who are less reliant on emergency financial support in times of crisis. Supporting financial resilience pays off for both employees and employers.”
