Skip to content
  • Blog
  • 28th Sep 2022

Supporting employees to save via Credit Unions in Northern Ireland

It’s a difficult time to think about saving. Energy bills are expected to skyrocket by October 1st, inflation in the UK is at a 40 year high and the Bank of England has said the UK may already be in a recession as of September 2022. The current cost of living pressures have left many people unable to save, or forced them to eat into their existing rainy day savings to pay for everyday expenses. 

Even prior to the current challenges, UK households suffered from a real lack of emergency savings. According to the Money and Pensions Service (MaPS), 10 million working age people in the UK do not save regularly – with 2 million people not having any savings at all – and are classified as financially squeezed or struggling. A lack of rainy-day savings leaves people even more vulnerable to unexpected costs and debt, especially when prices are rising. While we recognise that saving is simply not possible for everyone, there is evidence that, with the right tools, certain people have greater capacity to save than they think they do

One of the ways to support people that are struggling to save is through payroll saving schemes. Payroll savings schemes help people build a savings buffer by diverting a proportion of their pay into a savings account each month. We ran a research project with the Money and Pensions Service to evaluate the roll-out of payroll savings in two small and medium businesses in Northern Ireland, delivered through credit unions. The project is part of a larger body of work conducted under the Financial Capability Lab. 

In Northern Ireland, membership of Credit Unions (CUs) is relatively high compared to the rest of the UK, with 37% of people in NI signed up to a credit union, against a figure of around 3% for the rest of the UK. This project aimed to fill a gap in the evidence for payroll schemes delivered through credit unions in Northern Ireland. 

About the project

The payroll savings pilot scheme launched with two companies in Northern Ireland, which we will call Employer A and Employer B. Employer A has over 150 employees, while Employer B employs 120 people. Both businesses offered employees the opportunity to set up a payroll savings account with a CU. We reviewed how the payroll savings scheme was set up by employers and CUs, how the scheme was communicated to employees, and how users signed up to the payroll savings scheme. 

Read the report

Currently, payroll savings schemes are only offered by about 3% of UK employers with over 100 employees and take-up rates are estimated to be in the single digits


Employers should consider implementing payroll savings schemes in their organisation. There is emerging evidence that payroll saving schemes are helping people that are most in need and struggle to save. The findings from this project are in line with that.

We found that those who haven’t saved before are more likely to benefit from payroll savings. Some non-users were already saving, were happy with their existing savings arrangements and did not feel the need to sign up to a payroll savings scheme to boost their savings.

This was similar to findings from another MaPS payroll savings project with Capita, where one of the barriers to people signing up or making the most of the scheme was that they were already using other products to save.  It highlights that employers who have employees with relatively low savings levels, or those who are unlikely to have ever saved before, are most likely to benefit from payroll saving schemes. 

Consider the financial background of your employees (for example, whether they might already be a member of a CU). In Northern Ireland, employees are more likely to be signed up to a CU already, and may be reluctant to join another. To take into account the common bond of association of CU members and different locations of their employees, employers could partner with multiple CUs when setting up a payroll savings scheme. CUs could also explore data sharing partnerships to enable an account with a new CU to be set up easily, in cases where partnering with multiple CUs is not possible. 

Choose engagement strategies that are tailored to the size and context of the organisation, and highlight the benefits to your employees proactively. We found that trust and word of mouth were important facilitators in boosting take-up of payroll savings. Users of the payroll savings scheme reported high levels of trust in their employers. This may be a factor that is particularly relevant for SMEs. Users also reported high levels of familiarity and trust in the CUs.

For example, we found that the involvement of the CU in employee outreach was beneficial. It’s also important to make the sign-up process to both the partner (eg the CU) and the payroll saving account as easy as possible. Employers could be proactive in their communications by compiling a Q&A to add to their intranet and for the CUs to visit employees once a year, to update them on the benefits of payroll savings and to dispel any myths about their particular payroll savings scheme. 

Highlight the ‘set and forget’ nature of payroll savings and the flexibility to withdraw or modify contributions. People reported valuing these aspects of payroll savings schemes. The biggest barrier to take up for people who weren’t already saving was concern about whether they would be able to afford to save consistently every month. They didn’t feel that they could make consistent payments and felt embarrassed about having to potentially communicate this to their employers. Employers could think about how to set up schemes to avoid this, for example by starting with low amounts and reassuring employees that they could change their monthly payment amounts without judgement. 

Consider offering an incentive to boost take up. Users and non-users alike felt that take-up would be higher if an incentive were offered, which is corroborated by findings from other studies. We recommend that, if possible, employers offer an incentive to boost take-up of payroll savings and incentivise regular savings behaviour rather than incentivising saving a particular amount.

Consider both opt-in and opt-out payroll savings schemes, taking into account organisational culture and workforce preferences. Employees in NI had mixed views about the desirability of opt-out payroll savings schemes, with some suggesting they think it would be hugely valuable. Based on emerging evidence from a recent trial led by Nest Insight, participation in opt-out schemes may be likely to be considerably higher.

Read the report


Payroll savings are a key pillar in achieving MaPS’ strategic goal of developing a ‘Nation of Savers’ – encouraging 2 million more working age people who are ‘squeezed’ and ‘struggling’ to become regular savers. The findings of this project in Northern Ireland are in line with other UK research suggesting that payroll saving schemes may be especially beneficial to employees with relatively low levels of existing savings.

Currently, payroll savings schemes are only offered by about 3% of UK employers with over 100 employees and take-up rates are estimated to be in the single digits. Evidence suggests that barriers to uptake can be overcome by tailoring employee engagement strategies to the organisation, partnering with organisations such as Credit Unions if the employee base has a high rate of existing membership, highlighting the attributes of payroll savings such as how employees can ‘set and forget’ the amount they will save each month, and offering an incentive to sign up.


Default image

Ellie Lugt

Senior Advisor, Behavioural Insights Team

Dr Sujatha Krishnan-Barman

Senior Advisor