New guidance on workplace savings schemes for employers

Employers are to be given more clarity over workplace savings schemes that could help people become more financially resilient.

According to the Financial Conduct Authority (FCA), just 7% of employers in the UK currently offer workplace savings schemes.

However, the watchdog believes they could help millions of people start saving regularly and get into a stronger financial position.

The FCA is now working with partners to provide clarity on the rules around workplace savings schemes, so employers and savings providers can offer them more confidently.

This will cover issues such as how employers can avoid breaching National Minimum Wage requirements and how providers can meet financial promotions requirements.

“Financial inclusion is a shared effort,” said Emad Aladhal, director of retail banking at the FCA.

“This clarity should give employers greater confidence to offer savings schemes that can help people navigate their financial lives.”

The move has been welcomed by the government, which said payroll savings schemes are a “great way for everyday workers to put a little aside for a rainy day”.

“This statement helps businesses support their employees to make good financial decisions,” said Emma Reynolds, economic secretary to the Treasury.

Oliver Morley, chief executive at the Money and Pensions Service, added that putting even a small amount aside can “provide financial resilience and peace of mind for employees”.

According to FCA figures, one in 10 people don’t have any cash savings at all.

In addition, one in five have less than £1,000 put aside for emergencies.

Overall, 7.6 million UK adults (14%) had low savings and little capacity to withstand financial shocks.

As a result, many are feeling worried about keeping up with their regular expenses.

In fact, figures show that 7.3 million Brits (13%) feel heavily burdened by domestic bills and/or credit commitments.