For businesses who want to encourage saving, workplace ISAs are a good place to start. These are not a new innovation, however better technology, lower costs, and payroll integration have made them an easy and cost-effective solution for employers.

1) Engaging the young

Between stratospheric rent rises and wage stagnation, many young people can’t see a way to prioritise long-term savings – particularly when it comes to retirement. However, workplace ISAs offer a good middle ground. By offering a stocks and shares ISA you can encourage young people to think about longer-term saving, whether that’s to pay for a wedding, property or even a pension.

Phil Hollingdale, director at Smarterly said: “Employers increasingly realise that younger staff aren’t very engaged by pensions contributions. Workplace ISAs let businesses help employees save for the things they really want.”

2) Beating the lifetime allowance

Mid- and higher-earners are at risk of reaching the lifetime allowance, leading to a hefty tax bill of as much as 55%. In fact, HMRC collected £110m in revenue in 2016/17 – a huge jump from the £40m collected in 2014/15.

However, as the Lifetime Allowance has decreased, the government has consistently increased ISA limits. This makes ISAs a tax efficient alternative for those employees likely to reach annual or lifetime allowances - often senior management.

3) Better business benefits

Money issues cause financial stress among employees. In fact, research has shown that 30% of people lose sleep worrying about finances.

This can have severe business implications – including low productivity, mental health issues and absenteeism.

Promoting financial wellness among employees is not only the right thing to do, but also makes good business sense.

That’s why more employers are looking at holistic strategies, covering everything from helping deal with debt to planning for the future.

Workplace ISAs create a savings vehicle for employees but equally, when embedded within a holistic financial wellness strategy, can empower employees to take control of their finances.

4) Encouraging people to save better

Many consumers shy away from investment products, believing that they’re too confusing or too risky. In fact, 75% of all money saved in ISAs in 2017 went into cash. Monica Kalia, co-founder and chief commercial officer at Neyber says: “In the UK, low financial literacy is at the heart of everything. Lack of financial knowledge prevents people from using more sophisticated products.”

Offering ISAs in the workplace helps normalise investments. And if products are delivered alongside guidance can help workers transition to a product better suited to long-term saving.

5) Harnessing better technology

Workplace savings solution can be a cost-effective benefit to provide. Unlike their retail counterparts workplace ISAs can easily be integrated with payroll, making saving easy. And platform technologies combined with robotics mean that investments can be offered at a lower cost to consumers.

60% of employees believe their employer plays no role or doesn’t care about their financial wellness. But savings products and education programmes can improve employee engagement and bridge the gap between what staff want and what employers are able to provide.