Direct Transfer Scheme
Although a limited scheme was initiated at Cadbury's factory at Bournville in 1924, the first formal reference to a system that enabled employees to have a specific sum deducted from their wages and subsequently transferred to the Bank for the credit of their Savings Account was in the Bank's Annual Report for 1946:
At a number of Works and Factories, Branches of the Bank have been established, while at others the employees have authorised deductions from their wages for credit direct to their private accounts in the Bank. These methods of saving involve the minimum clerical labour for employers and the maximum saving for employees.
The establishment of branches in factories was a temporary wartime measure, but the Direct Transfer Scheme with its similar benefit of enabling deposits to be made without attendance at a 'normal' branch, may have resulted from the direct contact between the Bank and various factories.
Subsequent Annual Reports referred to the growing popularity of the scheme, and emphasised that .... Under this scheme depositors still retain possession of their pass books, but present them at the Bank from time to time for the credits to be entered therein.
The vast majority of employees participating in the scheme were weekly paid by cash, and their saving deductions were made on a weekly basis. Although it seems that some employers remitted the sums deducted to the Bank on a weekly cycle, the majority of firms accumulated the savings and passed them to the Bank each month. Prior to computerisation, the scheme generated large amounts of paper, particularly at schemes run by the region's major employers. Accles & Pollock at Oldbury probably had the largest scheme with several thousand savers amongst their workforce. The popularity of the scheme was due in a large part to the assistance given by the employers in making the service available.
Some employers encouraged participation by paying an interest bonus. The bonus was calculated from returns compiled by branches, who were instructed that the additional 2% interest [will be paid]
on the total amount saved by deduction from employees' wages, provided the employee's balance in the Birmingham Municipal Bank has increased by at least that amount, but if the increase is smaller than the amount deducted from wages, the additional interest will be calculated on the smaller amount (Fisher & Ludlow Scheme for 1953/54).
Participating firms brought a listing of their employees' savings into the Bank's Clearing Department, together with a cheque for the total amount of savings. The listing was sorted into branch order, enabling Clearing Department to analyse the covering cheque by individual branch totals. The individual details (account number; name of depositor; amount of savings) were then distributed to the appropriate branches for posting to the customers' accounts. Following computerisation of the Bank's accounting system, and the computerisation of employers' salary systems, the paper-based system was replaced by a computer tape being forwarded to the Bank's computer centre at Kidderminster.
A significant minority of depositors participating in the scheme withdrew their savings immediately after the credit was made to their account. The majority, however, used the system to accumulate savings for particular objectives. Eventually, of course, the payment of weekly cash wages was replaced generally by monthly salaries paid directly into bank accounts - the Direct Transfer Scheme being a forerunner of this method, and gradually incorporating it.
The Bank's Annual Reports did not give any statistics relating to the Direct Transfer Scheme (later, also known as Pay Roll Savings) until 1954, when it stated that over 900,000 had been deposited in this way during the year. Subsequent years were more specific: