Financial inclusion through payroll saving? The FCA comments on the potential and the practicalities of workplace savings schemes

The FCA has added another dimension to its drive to support consumers to build greater resilience and navigate their financial lives with a statement on workplace savings schemes published on 27 August 2025.

This comes against the backdrop of the FCA’s ongoing work to develop frameworks for firms to provide targeted support for pensions savers and to drive value for money in defined contribution workplace pension schemes, both of which have levelling the playing field for consumer saving and financial decision-making at their heart.

Workplace savings schemes offered by some employers allow employees to save through payroll by automatically diverting part of their salary into a cash savings account.

The FCA is keen to encourage more employers and savings providers (i.e. banks, building societies and other deposit takers) to work together to offer these schemes because of the potential benefits to consumer financial resilience and financial inclusion. But at the same time the FCA is aware that perceived regulatory barriers might be off-putting. The statement therefore highlights a number of key topics for employers and savings providers that might be considering setting up opt-in workplace savings schemes, and summarises how the FCA considers these schemes can be set up successfully and in compliance with current rules and legislation.

For employers, the FCA focuses on confirming that workplace savings schemes can be structured in a way that does not involve the employer carrying out a regulated activity (so it would not need to be authorised and regulated), but notes that communicating with employees about a scheme could involve financial promotions which a regulated firm may need to approve unless an exemption applies.

It also provides some guidance on how it considers employees can reduce the risk of possible breaches of National Minimum Wage regulations when diverting salary to a savings scheme, in response to queries from some employers.

For savings providers, in keeping with the tone of promoting financial inclusion, the FCA appears keen to emphasise to savings providers that it is open to seeing streamlined, joined-up onboarding processes that are closely integrated with employers’ existing systems and processes. Its focus in the statement is on inviting savings providers thinking about offering workplace savings schemes to consider how they can comply with their BCOBS and anti-money laundering requirements, in particular as part of their onboarding processes, without creating unnecessary friction or barriers to engagement for consumers.  It highlights that savings providers can explore getting employers (or their payroll providers or employee benefits companies) to provide employees with the saving provider’s T&Cs and FSCS factsheets, and to collect employees’ consents and acknowledgements, and also to provide the savings provider with much of the KYC information it will need on employees to avoid savings providers having to collect this from employees themselves.

Interestingly, the FCA’s comments on the Consumer Duty in the context of workplace savings schemes are limited. Savings providers exploring developing specific products for workplace savings schemes or adding these arrangements as distribution channels for existing products will clearly need to consider how this impacts their obligations under the Consumer Duty (including product governance requirements).

It remains to be seen whether the FCA’s encouragement will impact savings providers’ and employers’ appetite to develop commercially viable operational and compliance models for workplace savings schemes and unlock the potential for increased financial inclusion the FCA would like to see.

In the meantime savings providers and employers already providing workplace saving schemes may find the statement a useful prompt to review their arrangements and make sure:

• fee and account arrangements aren’t inadvertently causing employees to fall below National Minimum Wage requirements;
• marketing materials and communications procedures take account of financial promotions rules; and
• savings providers have sufficient access to data for their KYC processes, and appropriate data consents have been obtained.