40% of businesses offer a workplace savings scheme

Recent statistics released by the ONS [1], found that the level of disposable income being saved has risen from 9.6% to 29.01% this year. With lockdown restrictions stopping us from carrying out our usual activities, such as holidays, socialising and shopping, some UK adults are finding themselves with more disposable income than usual. Not to mention the millions of people now working from home who are potentially saving thousands of pounds on commuting costs.

Cushon recently conducted research [2] which looked at how Covid-19 has changed our attitudes towards savings and financial security. Really encouragingly, our findings found that 40% of UK businesses now offer their employees access to a workplace savings scheme. Financial wellbeing has never been more important and using the workplace to foster greater savings habits is a really effective way of encouraging more people to save.

It’s been a strange year for everyone, but if a global pandemic has taught us anything, it’s that we must never underestimate the importance of being financially prepared. Having a financial buffer in place so that should the worst happen, we’re better equipped to deal with it. For those lucky enough to have some extra cash at the end of each month, putting this money aside into some kind of savings pot is not only sensible, it also helps give you peace of mind that you have something to fall back on. And now more than ever, people are open to being supported and helped to do this by their employers.

Of those employees using a workplace savings scheme through their employer, over a third say they do so because their employer also contributes to their savings and over 30% like having the ability to save directly from their pay. Just under a third of employees choose to invest in their workplace savings scheme because it was easy to set up, and over a quarter of employees thought the schemes were better than using a high street bank. 26% of employees said that colleagues had recommended it. Just under 20% (19.41%) of employees were using workplace savings to make the most of the flexible benefits allowance given by their employer.

The research also looked at how savings habits have changed with the impact of Covid-19 and found that 40% of UK individuals are now putting this money aside so they have something to fall back on should unexpected circumstances occur.

Covid-19 has made us all more aware of the need to have a financial buffer in place to protect us in the event of the unexpected. What’s reassuring, however, is just how many of us now recognise the importance of having holistic savings – saving for our short to mid-term priorities but also having a pension and putting money aside for the long-term. Almost 26% of respondents said they were putting money aside for retirement. Other reasons for saving included wanting a better work/life balance (19.60%), saving a deposit for their first home (17.03%), putting money aside to make home improvements (16.26%) and saving on behalf of their children (15.08%).

For those that can, fostering regular savings habits through a workplace savings scheme can really help navigate life’s ups and downs and perhaps, more importantly, help individuals feel much more in control of their financial situation. Employers can offer the initiative as part of their existing benefits offering, providing their valued workforce with the ability to save from pay. Starting with as little as £10 per month, which can be taken direct from pay, Cushon’s platform offers a simple and convenient way for employers to enhance the financial wellbeing of their people. Many employers also choose to add contributions too.

Sources

[1] ONS Coronavirus and its impact on the UK Institutional Sector accounts – July 2020

[2] Cushon research on financial security and its importance – September 2020