Nest Insight has launched a new research trial in the UK in collaboration with SUEZ Recycling and Recovery UK and TransaveUK to test the effectiveness of a withdrawal approach to saving emergencies in the workplace.
This groundbreaking essay, considered one of the first of its kind, will examine whether making employee savings the default allows many more workers, who want to build a savings buffer, to get started. Nest Insight’s Payroll Withdrawal Option program was made possible with support from the BlackRock Foundation and the Money and Pensions Service (MaPS).
Over the next six months, new entrants to SUEZ, a leader in recycling and waste management, will automatically be registered for employee savings with the Transave fund, if they do not withdraw. Building on early findings from Nest Insight sidecar savings trial, it is believed that the automatic nature of this approach will reduce barriers to savings by reducing enrollment frictions and overcoming inertia – the tendency of people to do nothing when faced with a decision. This change, similar to the approach used for automatic pension enrollment, preserves employees’ choice of what to do with their money, while preventing them from having to go through a full enrollment path if they want to get started. to save. Instead, there is only one decision to be made: whether to opt out. Employees will be able to change the amount they save if they want, quickly withdraw their money if they need it, and they can stop saving at any time.
Working with academics, Sarah Holmes Berk, John Beshears and David Laibson from Harvard University, and James Choi from Yale University, Nest Insight will assess the effectiveness of the approach. The trial will compare around 600 new SUEZ entrants to whom employee savings plans with Transave are offered as an opt-out, with a control group which will continue to be offered employee savings as an opt-in. Research will be conducted over a year to assess participation rates, savings behaviors and the impact on the financial well-being of employees.
Guy Opperman, Minister of Pensions and Financial Inclusion, said:
“Employers have a critical role to play in helping their staff build financial resilience. Programs offered by employers, such as employee savings plans, can help people build a safety net that allows them to withstand short-term financial shocks.
“Participation in emergency workplace savings programs is too low and I look forward to reviewing the results of this trial. “
Michelle Sutton, Head of Reward and Pensions at SUEZ Recyclage et Recuperation UK, said:
“Our proactive and holistic approach to supporting our employees encompasses all aspects of their well-being, including their finances. This trial complements our existing portfolio of financial benefits which includes a payday advance service, savings plan with membership option, emergency loans, discounts with a wide range of retailers and webinars on financial wellness topics such as budgeting, pensions, and fraud prevention.
“We know our employees use the payday advance service and, by setting the default savings amount at £ 40 to match the average payday advance withdrawal, we hope this will be an accessible and user-friendly way. for staff to build a savings buffer to draw on for those unforeseen expenses, such as broken appliances or emergency vet expenses.
“We have ensured that communications with our new beginners on the withdrawal model are completely transparent, allowing them to decide if saving is right for them, and we look forward to hearing from those who are saving, on how the test affects their financial situation and their attitude towards saving.