Getting the balance right: liquid vs. illiquid savings

13 February 2019

Thanks to auto-enrolment, millions of people are now building up meaningful pension pots to help them save for a more comfortable later life.

However, many of these people, particularly those on lower and moderate earnings, don’t have enough in liquid savings to deal with financial shocks, such as the car breaking down. When this happens, they may stop pension contributions, reduce spending on essentials or turn to payday lenders or credit cards.

Financial shocks can cause acute financial hardship and debts can quickly turn into debt spirals which can cause high levels of stress and have a real impact on health.

To address this issue, NEST Insight have recently launched a research trial to explore whether the sidecar savings model can improve workers’ financial resilience today and in retirement by helping them to build up some emergency savings whilst also saving more for the future.

Watch this short video on sidecar savings to find out more about the trial and how it works.

About NEST Insight

NEST Insight is a collaborative research unit, set up to understand and address the challenges facing NEST members and other defined contribution savers. Visit to find out more.