A NEW service is being launched for Scots workers – and their employers – to help them save at work.
Social Justice Secretary Shona Robison says modest payday saving can build up valuable buffers for time of need.
Coronavirus, and the financial crash before it, proved millions of people save little, even when working, and the pandemic hit those families without a nest egg hardest and fastest.
Now the Work and Save – Scotland campaign aims to put that right, spearheading a gearshift move towards workplace savings – small amounts from pay which could save the day.
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A large scale 2021 study commissioned by the UK Money and Pensions Service showed savings of just £750 can help mental health stresses causing illness and absence from work.
Now money from the Scottish Community Lenders Fund is to kickstart save-as-you-work deals with big companies and organisations which do not provide them yet.
Savings scheme has been launched
The set-up cost of these workers’ schemes financially will be nil, thanks to Social Investment Scotland (SIS) using public funds to bring campaigners at Action for Financial Inclusion CIC and credit unions Capital and Scotwest together.
The scheme will be non-profit making because credit unions pay out their surplus income in dividends to savers, rather than pocketing the revenue. It differs from general saving by using salary deduction to automate small, painless payments.
Ms Robison said: “Putting a small amount of money aside on payday can make it easier for people to build up a valuable financial buffer that is there when they need it.
“I’m pleased that our Scottish Community Lenders Fund is supporting Work and Save to help more employers set up workplace savings schemes.
“As well as promoting good financial management, it will also support credit unions by enabling them to offer a range of financial services to those who may not have access to more traditional financial routes.”
Social Justice Secretary Shona Robison says modest payday saving can build up valuable buffers for time of need
Chris Jamieson, head of investments at SIS, said it is delighted to manage the Scottish Community Lenders Fund on behalf of the Scottish Government to help credit unions and community development financial institutions recover and grow following the impact of the Covid-19 pandemic.
He added: “A consortium bid headed by Capital Credit Union, Scotwest Credit Union and the Financial Inclusion Centre focused on the promotion and expansion of payroll savings schemes throughout Scotland. This has led to the setting up of the Work and Save – Scotland initiative.
“With the initiative about to go live, we look forward to seeing the success and uptake of the scheme to help, encourage and support individuals to grow their individual savings, leading to more financial independence.”
Although Scotwest and Capital will launch the initiative, local credit unions will also take part in 2022.
The Scottish Government is keen to see more workers take advantage of credit union facilities as part of its financial inclusion goals.
Capital chief Marlene Shiels said: “We’re excited to be working with Scotwest to grow the number of payroll saving schemes in Scotland.
“Through increased awareness and education, we hope to benefit employees by giving them a predictable and automatic tool for building financial resilience – employers too by reducing the stress and money worries which often affect staff productivity and absenteeism.
“This joint initiative introduces the practical steps we’ll be taking over the coming year to see this vision fulfilled.”
Scotwest chief executive Frances McCann said: “We know access to financial services is essential for dignity and a decent life.
“Poor financial wellbeing not only affects individuals, but also has an impact within workplaces and on the wider Scottish economy.
“We are therefore delighted to be partnering with Capital Credit Union and Action for Financial Inclusion to promote payroll saving services.
“I would urge employers to get involved with the Work and Save initiative to help empower their staff.”
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