Building financial resilience through Smart Payroll Savings

As household finances continue to be squeezed, developing savings habits has never been more important. HM Treasury released their Financial Inclusion Report this month, which highlights that millions of people still lack a basic savings buffer and Welsh employers are playing an important role in improving their employees’ financial resilience through partnerships with organisations such as Smart Money Cymru to provide payroll savings accounts.

Many UK adults lack a sufficient cushion to manage unexpected expenses. Low savings mean that even relatively minor shocks-such as an unexpected bill or a delay in income, can force people to borrow or go without essentials.

For employers, this isn’t just a social issue. It’s a business one.

Workplace wellbeing strategies often focus on mental and physical health, but financial wellbeing can and often does, directly impact on performance. When employees struggle financially, employers feel the impact through lower productivity, increased stress, higher absenteeism and reduced job satisfaction.

HM Treasury points out that whilst establishing savings is crucial to building financial resilience, it can be difficult for those with tighter budgets, so suggests that payroll savings schemes such as Smart Payroll Savers could be the answer. Payroll savings schemes offer a simple, automatic method for building up savings. Essentially, a portion of an employee’s salary is redirected into a savings account managed by Smart Money Cymru. Because contributions come directly from pay, the process requires minimal effort from individuals, helping them save without having to make active monthly decisions. This “set-and-forget” approach helps employees build a safety net over time, even if they’ve struggled to save in the past.

Studies of payroll-linked credit union schemes show that employees typically save £50–£70 per month even in lower-income brackets. However, any regular amount accumulate quickly and help prevent short-term borrowing.

Why it works

✓ Habit and consistency Payroll savings make saving habitual. People are more likely to save regularly when contributions are automated.

✓ Resilience Those in payroll saving schemes report higher financial satisfaction and are more resilient to income disruption than their peers who are not saving this way.

✓ Scalability Because the system is integrated into payroll, it can be scaled up across companies and sectors, making it accessible to all employees, regardless of income or position.

✓ Stronger employee wellbeing Financially secure employees are less stressed, more focused, and more satisfied at work.

✓ Improved retention and morale Offering payroll savings shows a genuine commitment to employees’ long-term security, positioning the employer as a supportive and responsible organisation.

✓ Minimal administrative burden Payroll savings can be easily integrated into existing payroll processes and there’s no account management from the employer.

✓ Positive corporate reputation Supporting financial inclusion aligns your organisation with national initiatives highlighted in the Government’s report, boosting your ESG and CSR credentials.

The UK Government is increasingly backing payroll savings as part of its wider financial inclusion strategy. Regulators are also stepping in. In 2025, the Financial Conduct Authority (FCA) issued a statement clarifying the rules around workplace savings schemes, making it easier for employers to offer them without concerns over regulatory or wage-minimum issues.

Meanwhile, academic and nonprofit groups are pushing for further adoption. For example, Nest Insight evaluated “opt-out” payroll autosave trials, where employees are automatically enrolled (unless they choose not to save), and found strong engagement, especially among those who had little or no savings previously. NEST Insight Unit

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