REWARD
the total amount deducted to the financial services provider by bank transfer, which allocates it to the relevant individuals’ savings accounts. There’s no cost to providing workplace savings beyond the small amount of administration required. Of those employees who confirmed money worries had impacted their work, 60% said they’d be interested in a workplace savings scheme if this was offered to them
access their money whenever they need it. They’re completely independent of the employer, who can’t access or view the account, so there are no implications if the employee moves to a new firm. They’re also fully protected by the Financial Services Compensation Scheme. By saving via payroll deduction, the employee commits to putting some money aside from their pay, which is done for them automatically. This reduces the temptation to spend the money and there’s no sense of giving up the money as it doesn’t go into, and then out of, their main bank account. It’s these psychological benefits from payroll savings schemes that really make the difference between intending to save and actually being able to build savings. The following case studies illustrate how employees and providers can work together to support their employees’ financial well-being:
could be by assisting in building greater financial resilience for the future by offering a workplace savings or payroll deduction scheme. Of those employees who confirmed money worries had impacted their work, 60% said they’d be interested in a workplace savings scheme if this was offered to them. Under a typical workplace savings scheme, the employer partners with a financial services provider, such as a local credit union or building society, who will help to promote the scheme to staff. Employees opting to participate then sign up with the provider and decide how much they’d like to automatically save each time they’re paid. The financial services provider sends a file to the employer with the details of the amount each employee has asked to make in advance of the payroll being processed. Savings are then deducted by payroll from net pay, so there are no tax or pension implications. The employer sends
The savings accounts are typically instant access so the employee can
Case study 1 – Capital Credit Union Paul White, who is the chief executive of ELCAP states, “ELCAP is a Scottish charity which provides care and support for individuals who are affected by learning disabilities, physical disabilities and mental health problems. We employ over 300 staff, many of whom are members of Capital Credit Union. Our relationship with Capital enables our colleagues to save regularly and borrow affordably. Thanks to Capital, ELCAP staff get help to manage their finances from an ethical organisation that understands their needs. If our colleagues can avoid money worries, that’s good for them, good for ELCAP, and – most importantly – good for the individuals who rely on our support.” A school employee comments, “I first joined Capital Credit Union when I started working as a teacher. I opted to save directly from my salary, so it came straight off through payroll. It seemed more ethical than going to the bank, and I liked the idea of supporting the credit union’s community values. I also took loans with the credit union because they’ve been at a really good interest rate, and I appreciate not having to pay an additional direct debit – to me, the fact it comes off your salary is really convenient. It’s an amazing service – I’ve found the people I’ve dealt with over the years have been really professional. I think there are possibly misconceptions about what credit unions are, and what they can offer. Personally, I think it’s a super way of saving, and I always give Capital a big thumbs up to my friends and family!” Case study 2 – Glasgow Credit Union Pursuit Marketing wanted to discover what the key stresses were for their employees and eliminate them, to make employees happier and more productive at work. After learning that financial stress worries affected most of the employees, the company decided to partner with Glasgow Credit Union to offer a payroll deduction scheme to employees for their financial well-being. Lorraine Gray, group operations director at Pursuit Marketing explains, “The partnership between Glasgow Credit Union and Pursuit Marketing offers our staff access to a great range of financial services including savings, loans and mortgages. For us, it’s a no-brainer solution to help and support the financial health of our staff. The seamless payroll repayments make it easy for staff to save and build a buffer for any unexpected expenses.” Gillian Mclaughlin, working for Wheatley Group states, “Glasgow Credit Union is a fantastic way to save for a rainy day or to borrow for the unexpected. I’ve been a member for over 20 years. It’s easy to utilise your funds overnight and you know you can rely on getting access to your money easily. I have saved for holidays, car deposits and borrowed to do home improvements. I love the monthly updates that send me a note of my savings. It’s a real boost and gives comfort knowing the money is there for whenever I need it. I highly recommend becoming a member. It’s a professional, efficient service every time, and much easier than queuing in the high street for the bank!” Adam Bell, working for City Building says. “It’s a fantastic credit union – I love being able to pay money into savings before my salary is in my account on payday, so I don’t feel out of pocket. It feels like free money when I need it. Their online services and mobile app are brilliant – being able to access my account at the touch of a button is so handy. I’ve paid money into the credit union since I was an apprentice all those years ago, and if I didn’t have a Glasgow Credit Union account, I probably wouldn’t be so good at budgeting and saving.” n
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| Professional in Payroll, Pensions and Reward |
Issue 83 | September 2022
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