The FCA has taken action to help employers and savings providers offer workplace savings schemes in light of the Financial Lives Survey conclusion that around 30% o UK consumers have no, or less than £1000 in cash savings.
Only 7% of employers currently offer workplace, or payroll, savings schemes, and the FCA wants to encourage more. Those employers who offer schemes can offer them on either an opt in or opt out basis, and the FCA wants to encourage more employees to opt in, and is doing so by addressing the regulatory barriers that seem to be stopping more employers from offering schemes.
The guidance clarifies the position on:
- whether making a deposit could be seen as a deduction from wages and put the employer at risk of breaching the National Minimum Wage Regulations;
- whether employers risk carrying out regulated activities or making financial promotions in offering the schemes;
- how to handle requests for consent from employees to open a workplace savings account;
- due diligence considerations;
- data sharing concerns; and
- application of the FSCS.