Three out of four employers say that workplace savings should encompass more than pensions, according to new research.
This survey, by savings provider Smarterly, found that many employers want a ‘two-pronged’ approach that supports both long- and short-term savings goals.
However it found that more than half of businesses (59 per cent) said pensions remained a “priority” for workplace savings.
Smarterly found there was considerable interest in products that combine both different savings options. It said nine out of 10 businesses (90 per cent) would consider the ‘sidecar’ approach adopted by Nest, where contributions in excess of auto-enrolment minimum are paid into an accessible savings accounts. Once a pre-set savings target is reached contributions are diverted back into the pension plan.
This scheme is currently being trialled, but if it gets the green-light Smarterly says it expects many more businesses to look at similar all-in-one saving propositions.
Smarterly says employers recognise that pensions alone are no longer enough to support the financial wellbeing of their workers. A total of 88 per cent of senior HR and benefits professionals said it was their responsibility to provide support on all aspects of financial wellbeing to their employees.
But despite this, only 22 per cent of companies currently offer any kind of workplace savings vehicle, such as an Isa, in addition to their pension scheme.
Smarterly says that while pensions remain important, additional savings vehicles are needed to support savings goals, such as purchasing a first home or having an emergency pot of funds to cover unexpected expenses. This latter can help prevent workers falling into serious debt, which can cause ill-health and mental stress and result in falling productivity.
Smarterly head of proposition Steve Watson says: “Pensions continue to be a primary focus in the workplace when it comes to supporting the financial wellbeing of employees, but putting aside funds for retirement is not a priority for everyone.
“Many welcome more support on making savings for the short to medium term to help ease financial woes.
“Financial wellbeing is an important part of the employee benefit mix. Employees – young and old – need to be supported throughout their working lives and a good financial wellbeing programme can provide this. It’ll take radical ideas such as this to really engage people with saving for their retirement.”