Employers and payroll professionals closely following UK politics will be aware of the government’s new Financial Inclusion Strategy. Released on November 5, the 59-page document begins with a strong affirmation: “Financial inclusion can transform lives”. It goes on to detail the importance of a financially inclusive society and, promisingly, plans for policies and partnerships that will allow us to reach one.
This isn’t simply a strategy. It’s a call to action. It echoes something that has long since been a key message of Serve and Protect: financial inclusion must be a national priority.
The bigger picture: why we need financial resilience
As the report’s foreword states, “When people are included, a potential shock can become a manageable obstacle, and aspirations can become achievements.” The goal is a financial services system in which everyone has access to the resources they need to build resilience.
Statistics illustrating the current landscape are stark:
- Less than 10% of adults surveyed by the FCA in 2024 had no funds in savings.
- A further 20% had less than £1,000 saved.
- 9% would be unable to cover a week’s worth of living expenses should they lose their main source of income.
With mid-life professionals amongst those most at risk of being impacted by high bills, these numbers represent real vulnerability within the workforce. Your workforce.
The business cost of financial exclusion
As much as access to savings accounts, financial inclusion is about the ability to withstand life’s financial shocks. When employees lack this resilience, the cost isn’t just personal. It is organisational.
Money worries are consistently cited as a top cause of stress for UK employees. The impact of this stress is further magnified in high-pressure, frontline sectors:
- Cognitive load and risk: Take a police officer worried about a payday loan or a prison officer struggling with debt. It is unlikely they will bring 100% of their focus to high-stakes duties, because financial stress consumes cognitive bandwidth, directly impacting decision-making and workplace safety.
- Productivity and “presenteeism”: This stress leads to staff being physically at work but mentally absent, potentially costing the UK economy a huge amount of money in lost productivity.
- Absence and burnout: Financial stress is a primary driver of mental health issues. As research from Nest Insight shows, employers who tackle this see a “positive impact on their business priorities, including reducing absences.”
- Retention: Staff with no financial buffer are more likely to leave their jobs for a salary increase, even if only minor. This “turnover tax” can increase an organisation’s spend on recruitment and training.
How to improve employee financial wellbeing? A payroll deduction scheme, of course!
The impact of payroll deduction on workplace wellbeing
The government’s strategy highlights possibly the single most effective tool employers can deploy: payroll savings.
This is a simple mechanism that allows employees to save directly from their salary. The strategy notes this form of saving is “particularly beneficial for people on lower incomes and those who have previously found it difficult to save.”
At Serve and Protect, we have seen this in action for more than 20 years. Our armed forces membership now exceeds 15,000, ranging from 16-year-old recruits to senior ranking officers.
Much of the power of payroll saving lies in the automated “pay yourself first” principle. Saving every month requires both organisation and self-motivation, but a payroll automates it. As Clare, one of our own members from the police, told us, “[it] Made me organised and my mental health is so much better.”
So… What’s stopping you now?
If payroll saving is so effective, why do some employers hesitate? In the past, concerns such as regulatory boundaries and “promoting” financial products have held companies back, acting as barriers to improved employee wellbeing.
The Financial Inclusion Strategy takes steps to remove these barriers. In a new landmark regulatory statement, the FCA now provides employers with the “clarity and confidence” needed to offer workplace savings as a valuable staff benefit.
Alongside it, MaPS, The Investing and Saving Alliance (TISA), and Nest Insight are bringing together a national coalition of employers, including major names like Bupa Care Services and The Co-op Group, guided by the Building Societies Association (BSA) and the Chartered Institute of Payroll Professionals, to promote the power of payroll schemes for employees.
How to implement your new staff benefit: “opt in” vs “opt out”:
More than simply telling employers to use payroll to support their employees, the government document offers advice on how to encourage it.
- The “opt-in” model (this is good): The traditional method where employees are informed of the benefit available to them but must actively enroll.
- The “autosave” or “opt-out” model (this is great): Participation really skyrockets when the setup is made as hassle-free as possible via an opt-out model. Employees are automatically enrolled upon being added to the payroll, meaning the team and their employers experience the full impact of payroll deductions.
Notably, the report gives us hard evidence in favour of opting for “opt-out”:
- SUEZ UK: The recycling and recovery company has adopted the automated approach. Every new staff member has a savings account created for them, into which they begin making automatic salary savings unless they choose to opt out. Participation rate amongst Suez new joiners is 48%. Each saves an average of £40 a month with a credit union. This case study is cited as being “popular with employees” and has “supported those who previously did not have savings and those who lack financial confidence to get started.
- Bupa Care Services & The Co-op: Staff participation rose to almost 70% during trials at both organisations. Average savings balances grew to £96 after just four months, then £170 after eight. Healthcare provider Bupa now have a continuously growing figure of 5,300 saving employees.
Not only are these employers contributing to the financial resilience of society in the UK, but all three also report that supporting staff through payroll deductions has had a noticeable positive impact on business, “making it easier to fill shifts, and being better able to maintain continuity of staff.”
Reduced gym memberships and retail discounts are great, but the payroll deduction scheme displays social responsibility to an extent that cannot be claimed of these more mainstream staff benefits.
Employers, payroll professionals, HR teams – it’s down to you…
The government has provided the strategy. The FCA has provided regulatory clarity. Research and data have provided the proof.
The question for you is no longer “Why should we do this?” nor is it “Do we need this?” In 2025, the question to ask is “When can we start?”
And the answer is: here! As the government strategy cites, Serve and Protect has been part of the Ministry of Defence’s Joining Forces initiative since 2015, running a payroll savings scheme along with two fellow credit unions for more than 25,000 members of the armed forces family, as well as offering the benefit to employers across the police, prison, probation, fire and health services.
With decades of experience working with these sectors, we’ve grown to become one of the largest credit unions in the UK. We truly understand our members and their employers. Our systems are built to integrate seamlessly with payrolls.
The people in these public and private sectors are the ones who serve and protect us all, so we aim to protect their mental wellbeing. A payroll scheme is a zero-cost, high-impact benefit that actively reduces stress, improves focus, and breeds loyalty. Each employer who takes part is improving nationwide financial resilience. This is what it means to be “stronger together.”
So, what can you, as an employer, do now?
All it takes is a simple conversation, and you too can become a part of our mission!
- The information provided is for guidance and educational purposes only. Serve and Protect CU does not offer regulated financial advice. Please seek independent financial advice.
