A major new initiative aimed at helping UK adults establish emergency savings funds has been launched with the introduction of the National Coalition for Workplace Savings. The programme could provide more individuals with a financial cushion to manage unexpected expenses and potentially help some steer clear of costly borrowing.
Employer-Driven Coalition
The employer-driven coalition encompasses various sectors, including retail, hospitality, transport, facilities management, the public sector and charities. Collectively, it employs approximately 400,000 individuals and includes 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 added: '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.'
How Workplace Savings Schemes Work
Workplace savings schemes enable individuals to accumulate regular contributions into a savings fund. Workers utilising such schemes may begin setting aside a default sum through payroll into their own instant access savings account, with funds kept in cash that can be accessed at any time without incurring charges.
Millions of individuals are already accustomed to accumulating their pension funds through workplace schemes operated by their employers. Ms Blake said of 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 added: '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.'
Goal to Make Workplace Savings a Habit
Ms Blake also said the initiative could help some people to avoid taking on debts, adding: '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 established through the Government's financial inclusion strategy and will aim to boost the number of UK workers accessing and benefiting from workplace savings by promoting uptake, exchanging best practice and supporting innovation in the years ahead. The initiative is urging employers throughout the UK to register their interest, with the aim of strengthening their staff's financial resilience and working collectively to encourage a savings culture.
How Businesses Can Join
Businesses can become part of the coalition by submitting an enquiry via its website, or by reaching out to 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.'
