Key Takeaways
- • Asos has issued a request for proposal for a new flexible employee savings provider that lets staff split savings between retirement and shorter-term goals, including Lifetime Isas (Lisas) and the full Isa range.
- • Asos plans to split employee goals into short, medium and long-term targets, with Isas, investment accounts or cash covering short and medium-term needs, Lisas or share plans funding house purchases, and pensions or other provision covering retirement.
- • Employees must still contribute at the auto-enrolment minimum, though contribution levels have not been set; Asos also plans a debt consolidation service for staff.
- • Industry voices, including Sir Steve Webb of Royal London and the PLSA's Nigel Peaple, warn that flexibility must not erode pension adequacy, with Webb noting that 8 per cent total contributions are not enough.
- • LCP consultant James Haggon, who worked on the proposition, said several proposals were received and a decision was likely within weeks.
Summary
Online clothing retailer Asos has issued a request for proposal for a new flexible employee savings provider, after deciding to let staff choose whether to focus on retirement saving or shorter-term goals, according to Pensions Expert. The offering would combine auto-enrolment-compliant pension provision with other products, including the Lifetime Isa (Lisa) and the entire Isa family.
The reward package is designed to help employees tailor savings to personal needs by dividing goals into short, medium and long-term targets. To boost engagement, Asos gave these goals emotive labels, such as 'turtles hatching on the beach', used to describe a retirement filled with the experiences staff dream of during their working lives. Asos envisages income being delivered through a range of savings products: Isas, investment accounts or cash for short and medium-term obligations, a Lisa or share plan for medium-term goals such as buying a house, and a pension or 'other' provision for retirement. Employees will still have to contribute to their pension at the auto-enrolment minimum, though contribution levels have not yet been set. Asos also plans to offer a debt consolidation service.
James Haggon, a consultant at LCP who worked with Asos on the proposition, said the decision followed careful consideration of member needs, and that a number of interesting propositions had been received, with a decision likely in the coming weeks. Asos, which LinkedIn named the top company UK professionals want to work for, faces more pressure than most firms to offer market-leading rewards. The Lisa was introduced by former chancellor George Osborne to help young savers balance house purchase against retirement provision.
Industry reaction is mixed. Sir Steve Webb, director of policy at Royal London, welcomed flexible programmes provided staff are first 'maxing out on employer pension contributions'. He noted that the relatively strict rules around Lisas should limit dilution of pension contributions, but urged employers to remind staff that saving above the auto-enrolment minimum is needed for an adequate retirement, saying '8 per cent is not enough for people'. Nigel Peaple, deputy director for defined contribution, lifetime savings and research at the Pensions and Lifetime Savings Association (PLSA), agreed that pension adequacy must not be sacrificed for flexibility. The PLSA's initial view is that, until it is certain short and long-term saving can be combined in a single product without one undermining the other, separate mechanisms and products are preferable. Haggon said Asos is launching an engagement drive to prevent savers from falling into these traps.
The reward package is designed to help employees tailor savings to personal needs by dividing goals into short, medium and long-term targets. To boost engagement, Asos gave these goals emotive labels, such as 'turtles hatching on the beach', used to describe a retirement filled with the experiences staff dream of during their working lives. Asos envisages income being delivered through a range of savings products: Isas, investment accounts or cash for short and medium-term obligations, a Lisa or share plan for medium-term goals such as buying a house, and a pension or 'other' provision for retirement. Employees will still have to contribute to their pension at the auto-enrolment minimum, though contribution levels have not yet been set. Asos also plans to offer a debt consolidation service.
James Haggon, a consultant at LCP who worked with Asos on the proposition, said the decision followed careful consideration of member needs, and that a number of interesting propositions had been received, with a decision likely in the coming weeks. Asos, which LinkedIn named the top company UK professionals want to work for, faces more pressure than most firms to offer market-leading rewards. The Lisa was introduced by former chancellor George Osborne to help young savers balance house purchase against retirement provision.
Industry reaction is mixed. Sir Steve Webb, director of policy at Royal London, welcomed flexible programmes provided staff are first 'maxing out on employer pension contributions'. He noted that the relatively strict rules around Lisas should limit dilution of pension contributions, but urged employers to remind staff that saving above the auto-enrolment minimum is needed for an adequate retirement, saying '8 per cent is not enough for people'. Nigel Peaple, deputy director for defined contribution, lifetime savings and research at the Pensions and Lifetime Savings Association (PLSA), agreed that pension adequacy must not be sacrificed for flexibility. The PLSA's initial view is that, until it is certain short and long-term saving can be combined in a single product without one undermining the other, separate mechanisms and products are preferable. Haggon said Asos is launching an engagement drive to prevent savers from falling into these traps.
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