Step 5 – Savings and investments

  • Financial education
  • 4 minute read

Every step towards financial wellness is about ensuring employees feel in control of their personal spending, saving and forward planning.  Savings and investment are an integral part of that, helping staff to achieve life ambitions as well as financial ones.

But without clear goals, saving can feel unfocused and even a bit futile. Imagine going for a run without an end point in mind or starting to cook without knowing what you’re going to make.

Savings goals will always be unique to each individual, dependent on their personal circumstances and broader ambitions. Knowing that there is a tangible result from saving helps to turn it into a ‘want to do’, rather than an ‘ought to do’. 

All of us will have a mix of short, medium and long-term plans that require money to make them happen.   Short-term plans could be saving for a holiday or covering the cost of Christmas. Medium-term goals might include saving for a house deposit or funding a major project such as a loft conversion. Long-term savings might mean putting money aside for retirement. 

Encouraging employees to set and manage savings goals might sound like a personal rather than workplace ambition, but this has advantages for employers as well.  Without long-term objectives, employees won’t be able to save effectively for retirement, and having achievable short-term goals means that they will become more financially resilient so less likely to struggle with money worries at work.

Here are five ways that employers and employees can work together to create a culture of saving at work:  

Build a savings habit

Consistently putting aside small amounts of money from as early an age as possible makes saving become a part of everyday life. Even if employees in mid-career haven’t saved regularly, it’s never too late to start - a pot of money can build up surprisingly quickly with regular contributions.

There are many ways to help employees achieve that. The most obvious is a company pension scheme to help with long-term savings. Other products, such as a workplace ISA or share save scheme, can encourage individuals to save for the mid-term as well. 

Financial education can also help here, for example by encouraging employees to use direct debits (or salary exchange for a pension) to put money into savings products. That helps to automate savings routines, taking away the temptation to spend before saving.

Create a safety net

Short, medium and long-term goals are a great way of focusing on future plans. But none of us can be sure exactly what the future holds. Sudden changes of circumstance, such as loss of income, can mean that even the best-laid plans go astray.  Another reason for making regular savings is to build a financial safety net so that should the worst happen, employees have the comfort factor of knowing they have money to draw on.  You can find out more about this in the ‘Protection’ section of our seven steps.

Save in the right place at the right time

The good news is that there are lots of different savings products on the market, from ISAs for short-term needs, through to pensions for long-term retirement savings.  The challenge is that there are so many possibilities, it can be difficult for employees to choose the right one for their needs.  Research carried out by Close Brothers has found that only 40% of employees are confident in their ability to choose the right savings product for their needs. Financial education and guidance can really help employees here. 

Weigh up risk and return

Selecting the right product at the right time is also about risk and return.  For example, saving into an instant access cash ISA has very little risk attached to it – the money won’t fall in value, so it’s useful for short-term goals. 

But, with interest rates still at a very low level, a cash ISA won’t help employees’ money grow over the long term and beat inflation. In comparison, a stocks and shares ISA or other form of investment could generate better returns over a long period of time but comes with the risk that the value of savings could go down as well as up.  It might, for example, be better suited to mid- or long-term savings where employees are able to wait longer for better growth. 

Check progress regularly

Setting and meeting financial goals isn’t a one-off process: what might be right for an individual today may not suit them in two or three years’ time. As employees achieve their savings goals or as their circumstances change, so will their future plans and the products that they need to fulfil them.  Regular check-ups and financial advice can support employees in staying on track.

Savings and investments is step five in Close Brothers’ Seven Steps to Financial Wellness series. 

If you would like to know more about financial education in the workplace please email

Before you invest, make sure you feel comfortable with the level of risk you take. Investments aim to grow your money, but they might lose it too.