Michael Royce, Senior Policy and Propositions Manager at the Money and Pensions Service, said:
“The Covid-19 pandemic has shone a spotlight on the impact financial resilience can have in times of uncertainty. Even before the pandemic, MaPS set out a goal to see 2 million more people saving regularly by 2030 as part of our UK Strategy for Financial Wellbeing. Yet we know there can be several barriers to saving, so we’re pleased to be co-funding Nest Insight’s new research on opt-out schemes to find ways to help more people build up their savings through payroll deductions.”
Minister for Pensions, Guy Opperman, said:
“We have all seen the extraordinary success that automatic enrolment has had in transforming pension saving for millions of today’s workers, and one of the many things this past year has emphasised, is the importance of building financial resilience.
“I have huge confidence that payroll saving schemes, offered by employers, will help people to build a financial buffer to absorb short-term financial shocks. These schemes help create good savings habits and I encourage employers to offer all their employees a voluntary, payroll-deducted, emergency savings scheme.
“I look forward to the next phase of Nest Insight’s workplace emergency savings research programme, and hope it will help accelerate action towards greater rainy-day saving.”
Last year, Nest Insight announced its involvement in the Financial Conduct Authority’s (FCA) regulatory sandbox, through which it has already been exploring some of the design and regulatory aspects of facilitating workplace ‘opt-out’ emergency saving. The next phase of this research is multi-faceted, encompassing:
- A new research trial later this year to test the impact of an opt-out joining mechanism for workplace emergency saving. The team is currently seeking one or more employers and savings providers with which to collaborate on this.
- Establishing an expert working group focused on understanding and explaining the legal and regulatory barriers to an opt-out approach to saving, and exploring the ways in which they could be addressed to make this a more viable proposition for employers.
- Identifying best practice in communicating with potential savers about the savings model through in-depth research.
- Forming research collaborations with a number of workplace savings providers with a view to identifying further trialling opportunities, and potentially looking at supporting other forms of goal-based or mid-term saving.
The original sidecar savings trial is ongoing and will continue to inform the next stages of the Nest Insight team’s workplace emergency savings research programme.
