Employers still failing to engage with Credit Unions
13 Oct 2015
We've joined West Sussex Credit Union's portfolio of employer SAYE schemes.
Their chair, Jenny King, writes today's blog piece.
In our latest blog Jenny King, Chair of the West Sussex Credit Union, explains why Credit Unions are such an important part of what employers can do for their people’s wellbeing and why it’s important to act now.
A report launched this week shows a disappointingly low level of engagement between employers and Credit Unions. The Chartered Institute of Payroll Professionals (CIPP) reportshows that 81% of credit unions have links with employers, but have achieved very little sign up, with limited time and resources cited as the main reasons why growth is slowing. Why aren’t we seeing the same vigour that auto-enrolment has given to pension savings, applied to credit unions?
There’s a glimmer of hope. We’re delighted to add Legal & General to our portfolio of employer SAYE schemes. We know, through our work over the past few years, that many people with good jobs can still struggle with their finances.
By encouraging people to save each month direct from their pay packet, Legal & General are giving their people a real alternative to the dangers of payday loans. Even though the FCA has weighed in to regulate payday lenders, their interest rates are still very high – often topping 1,000% APR. If people can pay off their loans at the end of each month this isn’t too much of a problem but when they can’t – that’s when the trouble starts.
We also see people on good salaries who have maxxed out on their credit cards and as so much of their disposable income is going to service these debts, it risks destabilising their family finances leading to stress and ill-health – both of which will impact on their performance at work.
So, a responsible and ethical SAYE scheme could help people to avoid unnecessary debt and be there for them when they need it through affordable loans. What’s not to like?
To recognise the ups and downs of employees’ finances, West Sussex Credit Union is now providing its payroll savings and loans to Legal & General employees.
This pilot in the Hove Office, as part of Legal & General's employee wellbeing programme, is rare in the FTSE 100, as few companies seem to have adopted a credit union. We’ve found that despite being a Living Wage employer, there is still a need to provide employees with the means of reacting to the ups and downs of family life.
Legal & General say that they’ll be working with other credit unions around the country to adopt them in other office locations.