Saving the day: How helping employees save could have ‘immediate and direct impact’ on thousands of families

Helping your employees to start saving money could transform their lives – so Co-op boss Shirine Khoury-Haq and Manchester metro mayor Andy Burnham joined up to encourage bosses to think of new ways to support their colleagues.

Many people in the UK workforce are struggling to put money aside for rainy days, as the cost of living crisis has continued to hit hard. That leaves them vulnerable to financial shocks and means their mental health can suffer as they worry about their debts and their finances.

Now employers are being urged to support their workers by launching opt-out saving schemes to help people get their savings pots started.

While auto-enrolment for pensions has become the norm, most workplace savings schemes are opt-in. But the Co-op and other employers including Bupa have been trialling auto-enrol schemes where their staff are signed up to savings schemes automatically until they choose to opt out, meaning small amounts are taken out of every pay packet and put into instant access savings accounts.

They say the schemes have been a hit with staff. And the Co-op’s CEO Ms Khoury-Haq said that if more companies introduced such measures, it could have an “immediate and direct impact on the financial resilience of thousands of individuals employed in Greater Manchester and the North West ”.

She spoke at a Talk Money Week event at the Co-Op’s Manchester headquarters, organised with financial innovation centre Nest Insight which is working to promote financial security in the UK.

Ms Khoury-Haq said: “The experience of our Co-op in offering a workplace savings scheme has been hugely positive for us as an employer and also for our co-op colleagues.”

The Co-op CEO said the Co-op regularly surveyed its 55,000 colleagues, and had found that one-off expenses can pose “significant financial difficulty” for those without savings and who have “little or no give.”

Those team members, she said, “have told us that starting to save is a huge challenge for them”. So instead the Co-op has worked with Nest Insight to launch an opt-out savings scheme. Of those auto-enrolled, 7/10 have continued saving.

Ms Khoury-Haq said: “The default solution for colleagues is to start saving small amounts unless they actively say they don’t want to.” And she added: "We think this approach could be as transformative as the intro of auto enrolment for pensions.”

And she added: “Now that we know the approach works we’re really keen to encourage other employers to do the same”.

Encouraging savings could, she said, support anti-poverty strategies across the region. And she said that helping people start saving is a “simple yet effective measure that employers have the power to make happen”. Ms Khoury-Haq said the Government should promote auto-enrolment in savings schemes.

Mayor Burnham smiled that in Talk Money Week, he had “had the ultimate talk money conversation” just the same morning, as Chancellor Rachel Reeves had been in town. He smiled: “We need more (money) in Greater Manchester. It pretty much went like that.”

The mayor pointed to the most recent GM Residents' Survey, in which 51% of people said they wou