The Government has thrown its weight behind payroll savings schemes as part of its new national Financial Inclusion Strategy — urging employers to play a central role in helping workers build financial resilience.
The strategy, published today, gives strong backing to ‘opt-out’ workplace savings — where employees are automatically enrolled to save through payroll unless they choose not to participate. The move mirrors the successful auto-enrolment model for pensions and aims to make regular saving the norm across the workforce.
A new National Coalition of Employers will be created to drive this expansion, working alongside the Money and Pensions Service (MaPS), The Investing and Saving Alliance (TISA) and providers such as Nest. The coalition’s remit will be to scale up access to payroll savings, particularly among lower-income and financially vulnerable workers, and to boost employee financial wellbeing across UK workplaces.
Will Sandbrook, managing director at Nest Insight, welcomed the strategy’s focus on employer-led saving:
“As our trials of opt-out payroll savings models show, workplace savings reach the people who most need support, help them to save persistently over time, and are popular with employees and employers alike.”
He added that these schemes do more than encourage good money habits — they can also strengthen employee wellbeing and productivity:
“Managing life without the peace of mind and sense of control that a savings buffer gives can take a real toll on mental health and relationships. Supporting people to save builds short-term resilience and long-term security. Financial inclusion can be an engine for productivity and economic growth.”
A role for employers in driving inclusion
Carol Knight, CEO of TISA, said the measures make it easier for employers to support staff by enabling part of their earnings to be diverted directly into savings:
“Reducing the risk of money being swept away in the pressures of everyday budgeting is key. We’re delighted to help bring together a national coalition of employers to encourage this move and deliver a truly inclusive financial system.”
Lou Davey, head of policy and external affairs at the Independent Governance Group (IGG), said the rollout of payroll savings draws on lessons from auto-enrolment:
“It’s a welcome step that taps into employee inertia in a positive way. Encouraging greater saving across society — both short- and long-term — can help close savings gaps, particularly for women and minority groups who are often falling behind.”
However, she cautioned that schemes must evolve to reflect modern working patterns, including those balancing caring responsibilities or working irregular hours:
“Payroll savings must be designed inclusively, ensuring they support today’s diverse workforce.”
