Asda launches big workplace savings scheme
Britain’s third largest supermarket chain has launched one of the biggest workplace saving schemes in the UK for its 150,000 retail workers.
Asda has partnered with Wagestream, the financial benefits company, to offer its workers a 4.7 per cent AER (annual equivalent rate) workplace savings account, which is protected under the Financial Services compensation Scheme.
The grocer said that, unlike high street accounts offering similar rates, employees would not be required to deposit a fixed amount and could also withdraw “at any time with no fees attached”.
The Leeds-based retailer’s staff can save either by setting a fixed amount to be taken out of their regular pay packet, which will be deposited into their workplace savings account, or by “rounding up”, where shift payments are rounded to the nearest pound and the difference deposited into their accounts.
The launch of the scheme comes as Asda attempts to revive its operating performance which has lagged rival grocery chains, including Tesco, Sainsbury’s and Wm Morrison.
Asda has struggled since the billionaire Issa brothers, Zuber, 52, and Mohsin, 53, and TDR Capital, the private equity firm, bought the business for £6.8 billion in 2021 in a highly leveraged deal.
Figures from Kantar, an industry researcher, last month showed that Asda’s market share had weakened to 12.6 per cent during the 12 weeks to August 4 from 13.7 per cent a year earlier. The latest monthly figures from Kantar are scheduled to be released tomorrow.
The struggles have prompted Lord Rose of Monewden, 75, the chairman of Asda and a retail veteran, to say he was “embarrassed” by the grocer’s performance and to press Mohsin Issa to step away from the daily running of Asda as the chain searches for a long-term chief executive.
As part of attempts to turn around its performance, Asda has also announced plans to spend £30 million more on staff and £50 million on a store upgrade programme.
About 36,000 of Asda’s workforce have already downloaded the Wagestream app and the retailer expects the workplace savings account to be the most popular benefit on offer.
Hayley Tatum, the chief people and corporate affairs officer for Asda, said: “This new benefit is alongside other financial benefits and support we already offer our colleagues at Asda, which includes financial education, budgeting tools, discounts and flexible pay.”
Asda cited Bank of England data showing more than £1 trillion of UK savings in accounts generating below 2.02 per cent interest, the average easy-access savings rate available to consumers.
The retailer also pointed to figures showing half of UK consumers had never switched savings accounts and a quarter having savings under £100.
Research from Asda, via its tracker of household disposable income, has recently found that saving is being prioritised over spending.
Despite a 14 per cent increase in disposable income for the average household during the second quarter of the year, compared with a year earlier, consumption fell by 0.3 per cent during the same period, it said.
Other large employers have partnered with Wagestream to offer financial benefits, including Burger King, New Balance, Pizza Express and the NHS.
