Birmingham businesses are being urged to help their employees put aside savings each month, with 4 in 10 workers in the city unable to survive if an unexpected bill came their way.
While Birmingham is known for its high employment rates, credit union Citysave highlights that this isn’t translating into financial security for many, with Government data showing almost half (42%) of the city’s workers are living in ‘employed poverty’, meaning they are living below the breadline despite having a job.
The average salary of a full-time worker in Birmingham is almost 10 per cent less than the UK average [Birmingham average – £33,952 per year; UK average – £37,430*].
ONS figures also show that more than 26% of people in Birmingham could not afford an unexpected but necessary £850 expense, and one in four borrowed money or used credit in the past month with Citysave warning many are turning to loan sharks or payday borrowers with exorbitant interest rates.
Birmingham’s Citysave credit union is calling on employers to help protect their workers by signing the City of Savers pledge. The pledge involves businesses enabling payroll deductions which then go into a savings account automatically. It means employees can save small amounts of their pay before it hits their pocket to help protect them when an expected bill comes along.
It also gives employees access to fair and ethical loans, providing a vital alternative to high-cost credit providers when they need a helping hand.
To date, employers in the region such as Birmingham City Council, the University of Birmingham, West Midlands Combined Authority and England Illegal Money Lending Team – BCC Trading Standards have signed the pledge and now offer the benefit to their workers.
Katie Compton, HR Project Officer (Staff Benefits and EDI) at University of Birmingham, said: “We are proud to promote the ‘City of Savers’ initiative. The scheme provides a tangible benefit which will both encourage and support our employees to save. At the University we will be signposting our staff to the Savings plans available through Citysave and we hope to be able to offer staff the facility to save directly from their pay into Citysave in the near future. This aligns with our commitment to support the financial wellbeing of our staff.”
Dean Lathbury, Reward Officer at West Midlands Combined Authority, said: “It is so important to offer support to the financial wellbeing of our West Midlands Combined Authority colleagues and working alongside Citysave allows us to do this. West Midlands Combined Authority are therefore very happy to be part of the Citysave family. Signing this pledge signifies our continued commitment to supporting Citysave and our employees’ financial health”
Sean Lynch, CEO of Citysave, says: “We believe everyone in our city deserves the chance to build a secure financial future, regardless of their income or background. By working directly with employers, we are removing the friction from saving and making it a natural part of working life.
“Payroll deductions through a credit union can help employees put a little money aside each month, whilst employers are able to offer this benefit completely free-of-charge to both them and their employees. This employer-led initiative is a way to build a more financially resilient city by tackling the cycle of living payday to payday.”
Richard Parker, Mayor of the West Midlands, said: “City of Savers is the grassroots movement we need. It’s a simple, smart way to tackle in-work poverty by helping working people save money and feel more secure. This is about creating a more productive and resilient workforce and building a stronger, more stable economy for everyone.”
To join the initiative or for more information on to become a payroll partner, visit citysave.org.uk/city-of-savers.
