Nest Insight to trial opt-out emergency payroll savings

Nest Insight’s workplace emergency savings research programme has been given an extra boost with additional support from BlackRock and the Money and Pensions Service.

Building on the learnings from its ongoing sidecar savings trial, Nest Insight is set to test whether an opt-out joining mechanism could enable more people who want to save through payroll to get started.

Will Sandbrook, executive director of Nest Insight, commented on the recent partnerships: “We’re delighted that the BlackRock Foundation and the Money and Pensions Service (MaPS) are expanding their support for Nest Insight’s workplace emergency savings research.

“Our partnership with both organisations has already enabled significant learning in this space, and we’re really grateful for their involvement. We’re also thrilled to welcome BlackRock on board as a strategic partner of the overall Nest Insight programme.”

Prioritising emergency saving

Over the last few years, Nest Insight has been working alongside employers and delivery partners to test the effectiveness and impact of a hybrid workplace savings tool, which combines short and long-term savings goals.

It identified that support for workplace emergency saving is a high priority among employers and employees, but that employee sign-up levels are low.

Meanwhile, a recent Nest Insight report on that trial found that inertia – people’s tendency to keep doing what they’re already doing – is a strong barrier to participation. In fact, 98% of people who state that they think the savings tool will help them have not yet signed up.

In contrast, auto enrolment has started to make a difference in the numbers of employees participating in workplace pension saving in the UK.

Now, Nest Insight will explore whether a similar joining mechanism could be facilitated by employers who want to support people to get started with emergency saving.

As part of the workplace trial, which will launch later this year, staff will be given the choice to opt out of payroll saving at any time. If they don’t choose to opt out, they will automatically start saving a default amount into an emergency savings account each time they are paid.

Sandbrook added: “We’re really excited about the next phase of this research, which, alongside what we’re learning from the ongoing sidecar savings trial, should make a real contribution to our understanding of what works in facilitating short-term saving and how that can support longer-term financial security.”

Financial wellbeing

Michael Royce, senior policy and propositions manager at the MaPS, explained that the pandemic had shone a light on the difficulty of saving due to financial uncertainty, however he added that “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”.

Blackrock’s UK head, Sarah Melvin, echoed a similar sentiment: “We know financial wellbeing is still out of reach for far too many people and that is why our philanthropic efforts aim to help more people build emergency savings and achieve financial security.”