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03 Dec 2020

Covid-19 cements importance of workplace savings schemes

There is no denying it, 2020 has been tough. Physically, as we adapt to a new way of living and try to protect ourselves and each other from coronavirus.  Mentally, as we learn how to deal with enforced lockdown restrictions, the unknown and feelings of isolation and anxiety. And financially, as the UK gets to grips with a recession.

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As an employer, there are things that we can do to support our employees in a physical sense – providing the right infrastructure to allow them to do their job from home or providing a safe workplace to be in. There are also great initiatives in place to help support mental health problems – mental health first aiders for example who help spot the warning signs of team members who might be struggling, through to offering one-to-one counselling support. There are also ways to support and engage employees with their financial wellbeing.

40% of employers offer a workplace savings scheme

Our September 2020 research looked at how Covid-19 has changed our attitudes towards savings and being financially secure. Our findings show that 40% of UK businesses now offer employees access to a workplace savings scheme. Financial wellbeing has never been more important and using the workplace to foster greater savings habits is a really effective way of encouraging more people to save.

If the global pandemic has taught us anything, it’s that we can never underestimate the importance of being financially prepared in the event of the worst happening. Having a financial buffer in place so that should the worst happen, we are better equipped to deal with it.

Savings habits

Office for National Statistics’ Coronavirus and its impact on the UK Institutional Sector accounts figures, show that the level of disposable income being saved has risen from 9.6% to 29.01% this year. For those that can, saving has become that little bit easier and the money being saved by not being able to have holidays and go out as much is being put away to save for those short, mid and long-term financial priorities.

Cushon’s research looked at how savings habits have changed with the impact of Covid-19 and found that 40% of UK individuals are now putting this money aside so they have something to fall back on should unexpected circumstances occur. After this, the second most popular reason for putting money aside is for retirement saving, with one in four individuals (26%) recognising the importance of saving for later years.

Other findings from the research included that one in five (19.6%) UK adults are saving for a better work/life balance, with many enjoying the flexibility of working from home this year and not having long commute times. With more time at home, 16% of individuals are putting money aside to make home improvements. 15% of those surveyed are saving on behalf of their children and 17% are saving for a deposit for their first home. 

Employer support for saving

For those lucky enough to have a bit of extra cash at the end of each month, putting this money aside into a savings pot is not only sensible, but brings peace of mind knowing there’s a buffer there should anything unexpected happen. And many employers are beginning to support this by bringing solutions into the workplace. Of those that aren’t currently bringing in solutions, the majority still agree that they should be helping employees save outside of a pension scheme.

Of those employees using a workplace savings scheme offered by their employer, 32% choose to use the initiative because their employer also contributes to their savings, and 30% like having the ability to save directly from their pay. More than a quarter (27%) choose to invest in their workplace savings scheme because it was easy to set up, and 26% said that colleagues had recommended it. Just under 20% of employees were using workplace savings to make the most of the flexible benefits allowance given by their employer.

Importance of financial resilience

Covid-19 has made us all more aware of the need to have a financial buffer in place to protect us in the event of the unexpected. What’s reassuring, however, is just how many of us now recognise the importance of having holistic savings – saving for our short to mid-term priorities but also having a pension and putting money aside for the long-term.

Financial wellbeing has never been so important and using the workplace to foster greater savings habits is an effective way of encouraging more people to save and feel much more in control of their financial situation.

This article is provided by Cushon.

In partnership with Cushon

Cushon is an online savings&investments platform provider, offering holistic workplace savings.

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