The financial wellbeing of employees is a moving target, especially as means, needs and challenges quickly change from one life stage to another. Providing a multi-generational financial wellbeing programme that meets the needs of all your employees will be crucial salary saving scheme.
How Payroll Salary Saving Scheme Work
With a payroll saving scheme, a portion of an employee’s salary is automatically deducted into a stand-alone savings pot with each payment. This kind of set and forget approach allows you to automate saving, allowing employees to slowly build a buffer or emergency fund over the years.
This is the most popular out of all financial wellbeing employee benefits. In a survey, 41% of employees indicated they would like to be able to save directly from their pay checks.
Employee financial wellbeing: The benefits
The payroll salary saving scheme allow you to provide many perks for employees and employers as well including:
Enhanced Financial Stability: Employees have the option to set aside money for emergencies.
Lower Financial Stress : Employees stress Less about what to do and how they will keep their finances on point as savings are automatically deducted
More engaged employees can be more productive: Employees who are financially secure often tend to focus better on their work and remain motivated.
In practice: Three employee examples
In this example, we will look at 3 employees from three different pay scales to see how much they could save with a payroll salary saving scheme.
Entry-level employee
Entry-level employee
Annual salary:
£20,000
Monthly savings contribution:
5% of salary (£83.33)
Savings over 1 year:
£83.33 x 12 = £999.96
Savings over 3 years:
£999.96 x 3 = £2,999.88
Mid-level employee
Mid-level employee
Annual salary:
£40,000
Monthly savings contribution:
5% of salary (£166.67)
Savings over 1 year:
£166.67 x 12 = £2,000.04
Savings over 3 years:
£2,000.04 x 3 = £6,000.12
Senior-level employee
Senior-level employee
Annual salary:
£80,000
Monthly savings contribution:
5% of salary (£333.33)
Savings over 1 year:
£333.33 x 12 = £3,999.96
Savings over 3 years:
£3,999.96 x 3 = £11,999.88
All these figures shown are great examples to prove that payroll salary saving scheme apply for both higher campaigners and foot solder`s as they save enough with time. Having £1,000 saved-up within a twelve-month period can be a vital insurance policy against the unexpected for the entry-level employee, placing their minds at ease and increasing wellbeing.
Salary employees in middle-management positions can go further to help achieve larger financial life goals by saving more than £2,000 a year towards things like a home deposit or additional study. Employees up to senior level with almost £4,000 salted away a year are able to either create a significant pot of money for emergencies or savings into more long-term financial stability.
For the organisation there is a positive flow-on effect
These savings have repercussions that go far beyond just individual financial health. A safe financial environment result in a low stress level among employee which leads to better mental and physical health. This in return reflects on increased productivity, reduced absenteeism as well as higher engagement at the work.
Conclusion : Payroll saving is a win-win for all
Organizations that adopt payroll salary saving scheme can enjoy a more engaged and committed workforce, lower turnover rates and improved employer branding. Establishing automatic and frictionless saving aids staff in creating a financial safety net, alleviating financial wellbeing stressors and increasing their levels of engagement and productivity.
HR and leadership will also make a real, positive impact for the entire business by enabling employees to build financial resilience.
Key takeaways
For instance, through payroll salary saving scheme employees of all the levels are forced to save.
Building a financial safety net and saving a lot even for one year can help employees on all pay scales.
When people are not stressed about money, as a result they can be productive towards their goals gaining improvement in mental and physical health.
Developing payroll saving schemes and making that available to employees could be an excellent differentiator for employers when it comes to attract, develop and retain top talent.
When employees are confident about their finances, they become more engaged and motivated, which pays dividends in terms of productivity and lower absenteeism.
Make saving easy for employees
Give your people the financial resilience they need with MyView PayNow: a complete app bringing payroll savings, budgeting tools and flexible pay architects together.
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