3 min read

Why is salary deduction so useful?

Many credit unions offer salary deduction, allowing you to save and borrow in an easier and more secure way. Find out more about how salary deduction can help you to manage your money in the article below.


Credit unions offer benefits not typically provided by other financial institutions. One of these unique benefits is something called salary deduction.

Salary deduction offers an easy and secure way of managing your finances in terms of saving and borrowing. This article explains salary deduction, its workings, and its usefulness in money management.

What is salary deduction?

Salary deduction is simply a process where money is taken from your gross pay each time you get paid. This can be either for mandatory or voluntary reasons.

Your mandatory deductions must be taken every time you get paid. This can be for things like tax, student loan repayments, and pension contributions. Whereas, your voluntary salary deductions are additional contributions you choose to make. For example, insurance premiums, retirement contributions, or salary sacrifice schemes for expensive purchases are all voluntary deductions.

Many credit unions will partner with employers to set up salary deduction schemes for their employees. This enables you to save and borrow with payments direct from your salary.

How does it work?

At Serve and Protect Credit Union we offer salary deduction with employers across the Police, Prison and Probation, Armed Forces, Fire and Rescue, and Health and Social Care sectors across the UK. You can save and borrow with deductions from your salary if you work for an employer who offers salary deduction with Serve and Protect, also known as a payroll partner.

By becoming a member  you will need to save a minimum of £10 per month into your Regular Saver account. If you work for one of our payroll partners, mandatory deductions will first be taken from your gross pay. After this, your savings deduction is taken from your gross pay and into your Regular Saver. You will then receive your net pay, which is what remains after your deductions are taken.

If you have a loan with Serve and Protect, your agreed monthly repayment will ultimately be deducted before you receive your net pay.

Why is it useful?

Firstly, saving via salary deduction makes it easy for you to save money. So, by joining a credit union and saving monthly from your salary, the hard work is done for you.

If managing money is tough, saving directly from your salary sets aside funds before you can spend them. This allows you to save consistently and spend your take-home money confidently, knowing your savings are secure.

This also means that your savings gradually grow in the background over time. If ever you experienced an unexpected expense and your financial resilience was tested, you have the funds to fall back on.

Secondly, salary deduction reduces the financial stress of managing your loan repayments. Managing multiple repayments every month can be difficult. Knowing that one repayment is automatically taken care of every month can be a comforting thought.

Missing a loan repayment can cripple your credit score for up to 18 months. Therefore, repaying your loan directly is beneficial as it virtually eliminates the risk of missing a repayment by using your monthly wages, thereby protecting your credit score.

Get started with salary deduction

At Serve and Protect, we offer salary deduction with employers across the UK, providing an easy way to save and a secure way to borrow straight from your salary. Become a member today for free here.

If your employer isn’t partnered with Serve and Protect, refer them here to access this free employee benefit.


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