Can sidecar savings help employees achieve financial stability?
04 May 2023
For many, building up a savings pot can be a challenging task, therefore, is it a good idea for payroll processes to support individuals in saving for a rainy day? This is exactly what Nest insights are trying to find out with their sidecar savings product ‘Jars’.
To give a brief overview of how it works:
- employee signs up
- choose savings rate and target
- the amount is deducted from salary each month
- once the savings target is reached the additional is rolled over into their pension pot instead
- the individual can use the savings as and when needed.
The key learnings from the Workplace sidecar savings in action report are:
- sidecar savings has high appeal with employees who need support with saving
- payroll savings enables employees to save persistently
- savers value having control and flexibility that Jars gives them
- payroll saving helps people build a safety net, boosting their financial wellbeing and resilience
- the pension rollover enables people to save more for retirement once they’ve built up some short-term savings
- take-up of sidecar saving under opt-in conditions is stubbornly low.
Dive into the report to see the data gathered from multiple surveys over the span of four years. The results paint a picture of positivityfrom employees who have benefited from the scheme.
As the cost-of-living crisis and financial wellbeing conversations bubble away, there are real struggles for individuals to save, both for emergencies and for retirement. It is clear that more can be done to encourage and support individuals to save and improve mental and financial stability. Every company is different and will have different needs from employee support and benefit packages, but sidecar savings might be the next big thing in this area.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.