I have written before about SUEZ’s can-do attitude to solving their worker’s financial problems. We are currently engaged with Michelle Sutton in helping staff get to know their workplace pension and use it to improve the outcomes of their retirement saving
But this blog is about a new initiative that I find equially exciting.
SUEZ are pioneering what can best be called “auto-saving” for a rainy day.
Over the next six months, new joiners to SUEZ, will be automatically signed up to payroll saving with credit union Transave, (if they don’t opt out).
Drawing upon early findings from Nest Insight’s sidecar savings trial, the hypothesis is that the automatic nature of this approach will reduce barriers to saving by reducing sign-up friction and overcoming inertia – people’s tendency to do nothing when faced with a decision.
Sidecar had been in a siding; evidence pu9blished last year suggested that take-up of sidecar savings on an “opt-in” had been disappointingly low.
This change, similar to the approach used for pensions auto enrolment, preserves employees’ choice to decide what to do with their money, whilst removing the need for them to complete a full sign-up journey if they want to start saving. Instead, there’s only one decision to make: whether to opt out. Employees will be able to make changes to the amount they save if they want to, quickly withdraw their money if they need it and they can stop saving at any time.
The trial will compare around 600 SUEZ new-joiners who are offered payroll saving with Transave on an opt-out basis, to a control group who will continue to be offered payroll saving on an opt-in basis. Research will be conducted for one year to assess participation rates, savings behaviours, and the impact on employee financial wellbeing. It’s being sponsored through Nest Insight.
NEW: NEST, the UK-government backed workplace pension scheme, is trialling a new system to help its low-earning members build emergency savings pots.
There is not anything quite like this in the UK workplace pension market.
— Josephine Cumbo (@JosephineCumbo) November 25, 2021
It’s good to see Guy Opperman getting involved and recognizing the power of proactive payroll
“Employers have a vital role in helping their staff build greater financial resilience. Schemes offered by employers, such as payroll savings, can help people build a safety net that enables them to withstand short-term financial shocks.
Workplace emergency savings schemes take up is too low and I look forward to reviewing the findings of this trial.”
It’s great to hear from Michelle Sutton, Head of Reward and Pensions at SUEZ
“Our proactive and holistic approach to supporting our people encompasses all aspects of their wellbeing, including their finances. This trial complements our existing portfolio of financial benefits that includes a salary advance service, an opt-in savings scheme, emergency loans, discounts with a broad range of high street retailers and webinars on financial wellbeing topics such as budgeting, pensions and fraud prevention.
“We know that our people are making use of the salary advance service and, by setting the default savings amount at £40 to match the average salary advance draw down, we hope that it will be an accessible and user-friendly way for staff to build up a savings buffer to draw upon for those unexpected outlays, such as broken appliances or emergency vets fees.
“We have taken care to ensure communications to our new starters on the opt-out model were fully transparent, empowering them to decide if saving is right for them, and we’re looking forward to hearing from those who save, on how the trial affects their financial position and attitude to saving.”
Nest Insight, has identified the link between saving and financial resilience
“The Covid-19 pandemic has shown us very clearly the importance of having accessible, emergency savings on hand to help protect against financial shocks.
But concerningly, it’s estimated that around 11.5 million people in the UK have less than £100 of savings to fall back on. We hope that our research can build understanding of how we can help many more people who want to build up a financial buffer to get started with saving and begin to turn the tide on the low levels of financial resilience seen particularly among low and moderate income workers.”
Getting the sidecar back on the road
If we are to be serious about financial wellness, we need to harness the two major success stories of auto-enrolment
- The power of payroll to make things happen
- The goodwill of certain employers to go the extra mile for the sake of their staff
Thank you SUEZ. Why not have a listen to Michelle talking to me about how she wants her staff to understand the value they are getting for the money being saved into their workplace pension?