Payroll-deducted saving schemes
Help your workforce save money and build financial resilience for a rainy day, work towards a goal and improve peace of mind.
Financial wellbeing in the workplace
Financial wellbeing is about feeling secure and in control of your money. It is knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future. In short: feeling confident and empowered.
The Money and Pensions Service (MaPS) is transforming financial wellbeing in the UK: we’re here to ensure every person feels more in control of their finances throughout their lives: from pocket money to pensions. Why? Because when they are, communities are healthier, businesses are more prosperous, the economy benefits and individuals feel better off. Covid-19 has made this more important than ever as we all recover from its impact.
How we can help you build employee wellbeing
Our physical, mental and financial wellbeing are closely linked. Supporting employees’ financial wellbeing as part of your overall employee wellbeing and benefits strategy has clear benefits for both employer and employee, but many employers find it difficult to navigate the host of available interventions.
MaPS can help you to explore:
- what you can do to build employee wellbeing
- what is most effective, and
- how to promote it.
Saving through your payroll is one of many ways to champion financial wellbeing in your workplace.
What is payroll saving?
Payroll saving is making regular savings directly from an employee’s pay. An employer deducts the amount the employee wishes to save directly from wages via the payroll.
Similarly to pension savings, the automated ‘set and forget’ nature of this process makes it easy for people to save by making it habitual and effortless.
Payroll savings schemes aim to help people build a savings buffer or support goals-based saving by diverting a proportion of pay into a savings vehicle each month.
Three types of payroll saving scheme
- Standalone: automated payments are made directly from an employee’s pay into a savings account.
- Repay and save: automated payments are made directly from an employee’s pay into a savings account in addition to paying off a loan.
- Linked to a workplace pension (sidecar): automated payments are made directly from an employee’s wages into a savings account, in addition to automated contributions into a workplace pension. When a cap set by the employee is reached on a sidecar savings account, any extra flows into the workplace pension, accessible at retirement.
Benefits of a payroll-deducted saving scheme
Attract and retain employees
There is promising evidence emerging on the impact and appeal of payroll savings. In 2015 the Chartered Institute of Payroll Professionals showed that 55% of employees aged 16-65 would like their employer to offer a payroll saving scheme.
Two 2020 Cushon surveys show that 72% of employees surveyed want access to a workplace savings scheme and 92% of employers would implement a workplace savings scheme.
Research indicates 8 in 10 UK employees take their money worries to work, affecting their performance. Minimise financial stress and improve productivity by providing this automatic service. (Close Brothers, The Financial Wellbeing Index, 2019)
Support available to employers
Financial product providers that work with employers to offer payroll-deducted savings, loans and salary advance schemes range from credit unions to fintech providers.
While the Money and Pensions Service cannot choose a provider for you, we can set out the product choices available to you.
Financial education and guidance on money management are important to help your people decide if payroll-deducted savings meets their needs – it should not be presented as a substitute to contributions to a workplace pension, nor should people set up a payroll savings scheme without considering first if they are on top of any debt commitments. MaPS, set up by government, is an impartial provider of money and pensions guidance on money and the largest funder of debt advice in the UK.
Contact our partnership team below for free, bespoke support.
Evidence your business case
Before deciding whether to offer a payroll scheme and which provider to go with, employers should always consider the financial wellbeing needs of their workforce, for example through a survey, to help build a business case.
Evidence your approach further with our insights and MaPS-funded research on payroll saving.
Evidence for sidecar payroll saving
BT, StepChange, the University of Glasgow and Timpson are taking part in a research trial of sidecar savings, where staff can opt into automatic deductions from their pay into a liquid savings pot, alongside contributions into a workplace pension. Early learnings show that employer support for the idea and product design is high, and there is a strong sense the salary deduction mechanism could be a very effective way to initiate a savings habit.
Employers are reporting that payroll savings can reduce the need for them to offer additional types of financial support, including loans and salary advances, that can require more intensive administration.
The ongoing trial makes this savings tool available to a wide range of employees, including people on a low income, part-time and seasonal workers.
Evidence for payroll saving with a credit union
NHS York and Leeds City Council worked with Leeds Credit Union to run a payroll savings scheme, and tested incentivising savings and using staff champions as role models. 70% of employees enrolled in the scheme saved every month and were 18% more likely to do so than non-members.
Increasing engagement with behavioural science
An upcoming project with Capita and Level Financial Technology will explore how best to encourage the uptake of payroll savings by applying behavioural science to improve employee engagement. The project will also investigate different approaches to encourage payroll savers to increase saving levels.
Contact our partnerships team
Contact our regional partnerships team for free support and practical ways to help you build financial wellbeing across your organisation.
If your organisation has multiple sites, please contact the regional manager closest to your head office.
Kevin has joined the Money and Pensions Service as Scotland Partnership Manager, having spent the last 20 years working in roles across banking and banking education for the Royal Bank of Scotland and the Chartered Banker Institute. He has significant experience of stakeholder management with financial services organisations, commercial employers and higher education institutions.
He is passionate about the UK Strategy for Financial Wellbeing and enjoys connecting with partners from all sectors to deliver our vision.
Outside of work, Kevin is married with two children, lives near Glasgow and is a keen trail runner, when the Scottish weather allows.
Margaret’s role is to build relationships with a wide range of private, public and third-party stakeholders, to help with the successful delivery of MAPS engagement strategy and business plan. Margaret’s initial work will include introducing and delivering propositions to Employers to help improve the way Employees manage their money, debt and pensions. Her role also includes planning and delivering forums, events and communications which help to deliver the business plan by bringing together cross sector groups to improve customer access to help and support.
Throughout her career she developed and executed a number of strategic business plans that involved proficiency skill. She gained recognition across the newspaper, magazine and retail industry for her directional ability to drive business and as a result built substantive collaborative relationships with national and international companies. Before joining MAPS she spent 15 months working for Business in the Community as their North West Director – during this time she completed three successful and sustainable projects.
Rhian has over 18 years experience of working within the financial inclusion and tackling poverty agenda in Wales. She was the Financial Inclusion Champion for North Wales. As well as working closely with Welsh Government, she is also experienced in working with the public, private and third sector to prioritise the financial wellbeing of citizens in Wales. She has worked closely with local government, housing associations, credit unions and the advice sector across Wales.
More recently, Rhian has worked within the mental health sector in North Wales, firstly for a mental health charity creating new initiatives with partner organisations to support individuals, carers and families with mental health problems to overcome barriers. Following this, working for DWP supporting staff on mental health awareness and financial wellbeing enabling additional support for customers. Also building closer working relationships between DWP and other organisations, including the local health board.
Rhian is a fluent Welsh speaker.
North West England
James Kelly is the Regional Manager for the Money and Pensions Service in the North West. His previous role was at Lloyds Banking Group where James developed options to assist customers who were in financial difficulty and / or significant arrears. This included successfully creating and operating the Mortgage Rescue Scheme which worked closely with local councils, debt and homelessness charities to assist vulnerable customers. During this time James was the Deputy Chair of UK Finance’s Arrears and Possessions Panel. He has also held senior roles at the Halifax and is a Board Member for a Housing Association which provides affordable properties to a diverse range of local communities.
North East England
Before joining MaPS, Karleen worked at The Careers & Enterprise Company for five years, where she worked in partnership with a wide range of public, private and third sector stakeholders, including education institutes and businesses. Prior to this, Karleen spent 15 years working in the education sector in a variety of education policy and practice roles.
Yorkshire and the Humber
Jenny has joined the Money and Pension Service as the Regional Partnership Manager for Yorkshire and the Humber. She joins us from Citizens Advice where she was a National Quality Assessor for Pension Wise. Having spent the last 7 years in frontline service delivery, working for Age UK, SCCCC and Citizens Advice she was able to shape services that make a real difference to the lives of real people. Before working in the third sector Jenny spent 20 years working in the financial services sector. A member of the Area Board, managing a team of retail, business and high net worth financial advisors at HSBC and being a qualified financial advisor herself Jenny is able to draw on her commercial and third sector experience to support organisations to build financial capability for their clients and employees.
Dawn Cummins is the Regional Manager for the East Midlands. She has extensive experience of stakeholder and partnership working across a range of sectors having previously worked as a CEO for a small charity where she led strategic engagement for the voluntary sector throughout Northamptonshire. Previously Dawn held a senior role at the National Housing Federation working with a wide range of housing associations with a particular emphasis on the East of England, East Midlands and West Midlands. She has extensive experience across the not for profit sector having chaired a housing association board based in the East Midlands leading its merger with a larger group to maximise housing development opportunities with an aim to provide more affordable housing for those most in housing need.
Tiana Pathmanathan is the Lead Regional Manager for the North of England regions at the Money and Pension Service, and has the role of Regional Manager for the West Midlands. Tiana initially joined the Money Advice Service (MAS) and its previous legacy organisations in 2010, and up until 2012 worked in the Partnership Team, embedding and promoting Money Guidance through National Partnerships, and Wales and the South West. From 2012-2019, Tiana had the lead for Debt advice sector and commissioned services quality and continuous improvement – creating a Sector Framework for accrediting Quality Standards and adviser Learning Pathways, a Peer Review Scheme and a Quality Assurance Framework for funded services.
Prior to MAS, Tiana was the Wales Policy Manager at the Legal Services Commission where she developed and published in collaboration with the Welsh Government, a joint Strategy for Legal Aid provision in Wales.
East of England
Alan Nicholls is the Regional Manager for the East of England at the Money and Pensions Service.
Previously he worked at Lloyds Banking Group for 14 years influencing their financial inclusion, financial education, credit union and Universal Credit multi-brand strategies. He served on the group’s East of England Regional Ambassador Executive Committee, as well as attending the Money Advice Service’s financial capability steering groups and UK Finance’s Financial Inclusion and Capability Forum. Alan is also a board director for Harlowsave Credit Union and trustee for ‘Home’ charity.
Monica is passionate about helping people to enhance their financial skills and make the most of their money. Her role is to work closely with organisations from the private, public, voluntary/third sectors to support their wellbeing strategies by accessing MaP’s free resources, removing the stigma attached to talking about money and providing impartial advice & guidance.
Prior to joining MaPS, Monica held senior roles within Social Housing and Regeneration. Monica has led the development and delivery of various strategies, including equality & diversity. Part of this work involved creating frameworks to support the construction industry and employment opportunities for women in various trades. When not glued to the laptop, Monica is an avid salsa dancer and a committed squash player.
My main focus as Regional Partnerships Manager is to understand financial wellbeing needs in West London and how I can support them – from employers, local authorities, community groups, business groups and others – helping more people access money and pensions guidance services. I represent my region in discussions around the UK strategy, policy and proposition development. I work with the region to engage key stakeholders and partners in this work.
South East England
Lee is a senior business professional, with an impressive achievement record in traditional marketing, digital marketing and business partnerships within the consumer and business sectors; strategic, creative, analytical and commercially driven, with an evidenced track record in revenue growth, customer engagement and behavioural change.
He has worked in b2c, b2b and b2b2c marketing and digital marketing roles in retail, financial services, Government, media, public advisory, trade bodies, gambling and technology.
South West England
Paul is a highly experienced senior business executive, with a 20 year track record of achievement working across, and collaborating with, sectors including defence, the NHS, education, SMEs, charities, not for profits, and the wider private sector. Previously a managing director, business development director and non-executive director across sectors, I have experience in workplace wellbeing, employee development, governance, strategy, business development and marketing.
Scott heads up the regional partnerships team in England, his team is responsible for engagement across the 9 English regions. Previously Scott led on the successful delivery of the What Works Fund and has held a number of partnership roles across the organisation.
Before this, Scott spent a number of years in leadership roles across financial services in retail banking and mortgages through to sub-prime consumer finance, arrears management and debt advice. This also Included setting up and running his own Debt Management company.