Employers: Why offer savings through payroll deduction?
Supporting the financial well-being of staff is good for them, good for the community, but also good for business too.
Chartered Institute of Payroll Professionals research states that around a third of the UK population with significant personal debt and financial stress causes the loss of 17.5 million UK working hours each.
By introducing staff to the concept of payroll deduction where a nominal sum is taken from their wage and placed into a savings account before they can miss it, employers are creating a financially confident workforce.
The CIPP suggests that offering saving and borrowing through payroll shows that employers take their staff’s financial wellbeing seriously.
It can be an incentive to draw more employees because it offers real value to the workforce and this not only assists with recruitment but ensures higher retention of staff.
The scheme also demonstrates how much employers value the wellbeing of their workforce which increases morale and productivity. Research shows that it also reduces absenteeism due to financial stress.
Payroll savings help staff build up a buffer to cover any unexpected expenses from a broken down car to a leaking roof.
By regularly saving they are also less likely to fall into the trap of turning to payday lenders whose high-interest rates can cause individuals into unparalleled levels of debt.
Research by the Financial Conduct Authority found that 4.1 million people in the UK are in serious financial difficulty.
People are seeing their wages been stretched further and further and additional pressure is also applied whilst wages continue to remain stagnant.
By encouraging staff to sign up to a payroll deduction scheme, employers are implementing a secure financial programme for their future.
Payroll savings have also become another essential offering which is provided to employees as part of a portfolio of benefits and deductions.