Enhancing Workplace Savings
11,000,000 and 82%, what do these figures represent? they are actually the number of individuals auto enrolled into workplace pensions since the launch in 2012 and the 82% is the amazing level of enrolled individuals from the population that is eligible.
It may seem difficult to believe looking at these figures now that many observers at the commencement of enrolment did not expect any such level of success, particularly as the process would involve lower earners and people employed in such sectors as retail which have traditionally had a high staff turnover!
However, whilst employer’s contribution and tax relief made enrolment attractive, other key factors massively contributed to the success of the scheme. Firstly, employee contributions are deducted direct from the individuals’ wages removing the need to organise direct debits /bankers orders and secondly, it could all be arranged at work, as with the best will in the world not many people feel sufficiently motivated to sacrifice a Saturday morning to make pension arrangements no matter how important.
There is also the very important point the money coming of wages simply adjusts the bottom line and psychologically it doesn’t feel like you are removing spendable income into savings. Back in the last century (the writer is of that age) many individuals who do not have the discipline to save regularly into a Building Society used to invest money in industrial assurance savings plans as contributions were physically collected by an insurance agent. Direct debit was of course an option, but knowing the premiums would be collected ensured continuity of saving!
So, what can we deduce from this lengthy introduction, simply people like to save, particularly in tax advantageous environments if funding is via wage deduction and can be arranged in the convenience of their workplace, something that is been recognised in the USA for many years.
Which is a really important point for employers who want to offer genuinely helpful and supporting employee benefits to their staff, and even better at minimal cost to the company as most payroll software can easily incorporate an additional deduction process.
This is not to say that ISAs should be seen as an alternative to pension saving as they do not have the benefits of employer’s contributions or tax relief on the contributions. However, the Popularity of ISA’s is already endorsed (according to Charles Stanley up) by the 21 million savers in the UK having ISA accounts by the end of 2024. Individuals saving for many other reasons than retirement, for example house purchase deposit, memorable travel projects and even emergency funds.
So, the opportunity for employer to enhance their benefit suite with the inclusion of ISA savings can be a very real consideration and one that would be valued by many staff. The good thing is that many of the major workplace pension providers such as Royal London, Legal and General, Standard Life, Aegon, Aviva and Hargreaves Lansdown already provide the facility of a workplace ISA as part of their workplace proposition.
Whilst there may not be significant operational costs in adding an ISA savings option, there will be administrative impact initially so it is imperative to utilise your employee benefit consultant skills with regard to ascertaining the potential popularity of such a benefit with the staff and also selecting the most appropriate product for your purpose.
May 2026
Acumen Employee Benefits Ltd, FRN 916905, is an appointed representative of Acumen Financial Planning Ltd, which is authorised and regulated by the FCA, FRN 218745. The content within this article is for information purposes only and should not be regarded as advice.
People enrolled since commencement of AE – 11, 430,000- AE Declaration of Compliance Report Data from the TPR as of March 26 –Automatic enrolment declaration of compliance report
Percentage of workers enrolled – 82% -Office of National Statistics – Employee workplace pensions in the UK – Office for National Statistics published March 26