Are pensions the be-all-and-end-all of workplace savings, or do Workplace ISAs (WISAs) also have a part to play? Reward looks at the evidence
Although Workplace ISAs (WISAs) are still relatively uncommon, employee benefits consultancy Hymans Robertson has taken the plunge and introduced a WISA alongside its company pension.
Steve Moore, HR manager, Hymans Robertson says: “We aim to offer our employees benefits with flexibility. Over the last year we’ve realised that saving into a pension doesn’t always meet our employees’ needs. We wanted to offer them a short to medium term savings option, but without compromising pension savings. We wanted to get employees into the overall savings mindset.”
An unusual characteristic of the scheme is the way employee contributions are handled. Each member of staff can choose whether to direct their contribution into either the WISA or the pension, depending on their personal priorities. Hymans Robertson’s employer contribution is added directly to the pension.
The WISA is still a new addition to Hymans Robertson’s benefits package and Moore is gauging levels of interest from his 540 staff. “With new benefits we always expect take-up to be slow. We hope to have around a 10% take-up during the first year. From our early communications, we’ve got 5% already.”
Moore hopes that offering the WISA will broaden the appeal of workplace savings to younger employees, for whom a pension may not yet feel relevant or important. From the early take-up Moore has so far seen, the WISA has succeeded in appealing to that part of the workforce. “There is a skew towards younger employees among those who have signed up,” he says.
Employee education is also important. “We were conscious that different products can be confusing so we wanted to make the communications as clear as possible,” says Moore. Hymans Robertson used company newsletters and online FAQs to support the launch, “but the most effective communication method we’ve used has been a series of road shows at our four offices to discuss this directly with staff,” he adds.
Julian Webb, head of DC and workplace savings at Fidelity, which provides Hymans Robertson’s WISA, highlights the importance of making the system straightforward to use. The WISA offers three levels of complexity, depending on the needs of the individual. Choosing appropriate options and deciding how to divide up contributions can all be done online by employees themselves. “For me, it’s been about making the employee journey as straightforward as possible and also making sure that integration between the products and Hymans Robertson’s flex benefits system worked well,” says Webb.