Maximising workplace savings

5th December 2011

“I was interested to read the article last month on auto-enrolment and how the share scheme and pension industry may best co-exist. In these challenging economic times employees have a number of options to consider when choosing their workplace savings.
For those individuals not presently meeting the minimum requirements of auto-enrolment it will have a negative impact on their disposable income. This could make the affordability of workplace savings, such as share schemes and Individual Savings Accounts (ISAs), tough. However, employees should not view the introduction of auto-enrolment as a ‘pay cut’ but use it to make provision to secure their financial wellbeing.

This is where communication and financial education are paramount, not only to understand the new regulations and the workplace savings options, but to learn how to ‘maximise their value’.

Employees will have their own personal financial issues and are likely to have different priorities, so different savings vehicles are required. While pensions are likely to remain part of a longer term savings strategy and share schemes for the medium-term, the workplace ISA can be a more flexible choice. It is also a useful savings vehicle for those senior employees who may be affected by the restrictions to pension tax relief. Undoubtedly auto-enrolment will be a financial strain to some, but with the benefit of financial education and specialist advice – the integration of workplace savings such as share schemes with pension and workplace ISAs can only provide a more prosperous financial future for all.”