As technology becomes increasingly important, Owain Thomas examines how platforms can support the employee benefits.
“What we are seeing more of is talking to employers about workplace savings. They liked the idea but didn’t think the timing was right, and now we’re starting to see some of our early stagers coming back and revisiting this, and that’s what we are expecting to see more of – people getting themselves over the line for AE, thinking ‘what’s next?’”
The next step
That next development could be a significant increase in the use of savings platforms across workplaces. Graves agrees that with people entering the pensions world for first time through AE and often not being very financially literate, these sorts of tools could help employers to tackle the issue.
Indeed, research from the provider found that online platforms could be a suitable way to communicate with staff. When asked how employers tended to communicate with staff and how employees would like their employers to communicate with them, 11% of employers said they used online tools, including portals and platforms, but 24% of employees said they would like their employers to use such tools.
This tallies with results from the second annual Workplace Savings Platform Guide compiled by the Lang Cat and Platforum. It predicts “rapid growth” of the workplace savings platform market once organisations have overcome the challenges of AE – their current priority.
As Lang Cat principal and co-author of the report Mark Polson explains, employers see the potential for using platforms once they have completed AE: “When we ask ‘Are you considering a workplace savings platform?’ the answer tends to be ‘Oh dear god no, I’ve got all this other stuff to do’. But if you delve behind that and say ‘In light of lots of new people saving, are you interested in technologies that might make it easier for people to access their savings and explore things that might be more suitable than a default?’ the answer starts to turn around.”
However, some of this enthusiasm should be tempered, as schemes already in place are seeing low take-up rates for simple savings products such as ISAs. Polson believes this indicates people are willing to use them, but that tax and other rules discourage staff from fully taking part: “The figures are moving – people are using these things – but the rate of adoption in terms of wider savings [such as accessing ISAs] is not. So the number of ISAs being opened is moving on an absolute basis, but workplace platforms still only account for between 1% and 5% of the market.
“So it tends to suggest that people who are going to buy an ISA anyway might be persuaded to do it through their employer. A lot of the excitement around other terms of savings tends to have dissipated in the industry, but really, as employers go, unless there were to be advantageous tax treatment then that’s not really of interest, and that goes for employees too.
“In terms of corporate ISAs, there are applications there for share save and there are good examples of how a well-managed rollover campaign has driven some
good results.”
Indeed, BT is one major employer that has been actively involving its workforce as much as possible when issuing share scheme rewards and in co-ordinating this with other savings products.
For organisations offering these benefits, investment in a workplace savings platform would appear a good consideration. However, when examining the wider integration of platforms, Polson suggests this might still be a more minor trend, but one that could develop in the future. “We don’t find a lot of evidence for that at the moment, but that would be a natural thing to assume, and that may well be the case at some point,” he says.
“But many of these benefits platforms are pretty new, so you’re not going to reverse something out after two years unless it’s a real catastrophe – and most flex benefits systems are not a total catastrophe, they’re fine, so we don’t see a lot of demand for that integration yet.”
So it appears clear that workplace platforms will continue developing for years to come, particularly as employers begin settling in to the everyday maintenance of AE and as total reward and flexible benefits offerings become more common.
