The National Coalition for Workplace Savings has been launched
A new initiative aimed at helping UK adults build emergency savings funds has been launched, with the introduction of the National Coalition for Workplace Savings. The scheme could provide more people with a financial safety net to cover unexpected bills and help some steer clear of costly debt.
The employer-led coalition spans a variety of sectors, including retail, hospitality, transport, facilities management, the public sector and charities. It collectively employs around 400,000 people and features organisations such as the Co-op, First Bus, Next, the Department for Environment, Food and Rural Affairs (Defra), Travelodge, Mitie and StepChange.
Rachel Blake, Economic Secretary to the Treasury, said: “We want people to build up a savings habit.” She went on to say: “We all know that having some savings ready for a shock, whether your boiler breaks, your car breaks or you’re not able to do as much work as you wanted to… we all know that having some savings can help with that, both (with) the practicalities of being able to cover your costs (and) also some of the emotional and financial consequences of having a financial shock.
“And that’s why having all of these employers sign up to help people to have a savings habit through a workplace savings scheme is really important.” Workplace savings schemes are designed to help individuals regularly set aside money into a dedicated savings pot. Workers using these schemes could begin setting aside a default sum through payroll into their own easy-access savings account, with funds held in cash that can be withdrawn at any time without incurring penalties.
Millions of people are already accustomed to building up their retirement nest egg through employer-run pension schemes. Ms Blake commented on the new coalition: “Having a workplace scheme, where it’s really straightforward to sign up to, where some of that initial thinking has already happened, means it’s much more likely that people will take up the habit.”
She went on to say: “I really hope that it builds up both the number of people who have savings as well as the scale of savings that they have, because there’s far too many people who don’t have any savings at all.”
Ms Blake also suggested the initiative could help prevent some individuals from falling into debt, stating: “We don’t want people having to turn to expensive debt to cover these emergency shocks and we also want this to become a longer-term habit so that people have confidence to save and confidence to not have to turn to debt or credit.”
The coalition was launched through the Government’s financial inclusion strategy and will strive to boost the number of UK employees accessing and benefiting from workplace savings by championing uptake, sharing best practice and supporting innovation in the years ahead. The initiative is urging employers throughout the UK to register their interest, strengthen their workforce’s financial wellbeing, and collaborate to help people build their savings.
Employers can join the coalition by enquiring through its website, or by getting in touch with the Money and Pensions Service, Nest Insight or Tisa (The Investing and Saving Alliance). Ms Blake said: “We really want to see more employers sign up to the scheme, I think this national coalition approach of bringing industry together to encourage each other is a really great way forward and I would encourage all employers to look into it.
“One of the points that I’ve been talking to employers about today is they know that having a happy and healthy workforce is good for their organisation and their business – and being happy and healthy in your financial life is a really important part of that as well.” Claire Costello, chief people officer at the Co-op Group and the coalition’s chairwoman, said: “With growing evidence of the benefits provided by workplace saving schemes, this collective of employers, supporters and partners will help more people build a financial safety net.”
Sarah Williams, chief people officer at OCS UK & Ireland, said: “For many colleagues, the gap between a manageable month and a difficult one comes down to whether something unexpected happens. A broken car, a school trip, an appliance that needs replacing. Workplace savings schemes work because they’re built around the realities of how people actually live.”
