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Supporting emergency saving briefing 2: Employer experience

Evidence type: Evaluation i

Description of the programme

This is the second in a series of briefing papers from the ongoing trial of a sidecar savings tool called Jars. Jars was designed to help address the lack of emergency funds and also the need of many DC customers to save more for retirement. The sidecar savings model is a hybrid savings tool that combines an accessible ‘emergency’ savings account (or ‘Jar’) with traditional defined contribution (DC) retirement saving.

Savings are automatically deducted from savers’ salaries and paid into their emergency savings ‘jar’. When savers reach their savings target, the salary deduction is sent to their pension pot. If the saver takes money from their emergency savings jar, their salary deductions are diverted back to their emergency jar until they reach their target again.

Jars is available across the UK, to DC pension savers whose employer is participating in the trial. At the time of publication, participating employers included Timpson, the University of Glasgow, BT and StepChange, with more employers expected to go live in 2021.

The trial is being delivered by a partnership between Nest Insight, BlackRock, MaPS, JPMorgan Chase and delivery partners Salary Finance and Yorkshire Building Society.

The study

This briefing paper explores early learnings about employer experience and response to the Jars savings tool. The paper considered:

  • Context to the roll out of Jars.
  • Employer responses to Jars.
  • Employer decision making around offering Jars.
  • Optimising side car savings for employers.

Learnings were drawn from 18 qualitative interviews with employers in three categories:

  • Representatives of employers who have launched or planned to launch Jars.
  • Representatives of employers who have considered Jars but not launched.
  • Stakeholders who have worked with employers to set up Jars, from Salary Finance, which provides the Jars tool, Yorkshire Building Society, which provides the instant access savings account, and Nest, which provides one of the workplace pensions involved in the trial.

Key findings

Findings fell into three broad groups:

Employer responses to the Jars concept and design

  1. Employers support the concept of a hybrid workplace savings tool due to its perceived ability to improve employees’ financial resilience.
  2. Jars is primarily viewed as a way to support employees to build up an emergency savings buffer. Pre-commitment to additional pension saving is seen as secondary aspect.
  3. Employers feel the salary deduction mechanism designed into Jars is, in principle, a very effective way to initiate a savings habit.
  4. However there is some concern around whether the mechanisms will be enough to overcome the barriers to saving that employees face.

Employer decision-making around offering Jars

  1. An organisation’s existing culture is an important driver for offering a hybrid workplace savings tool.
  2. Offering a benefit that can support employees with their financial wellbeing is felt to demonstrate that an employer is responsible and forward-thinking.
  3. Some employers cited concerns about the resource requirement or timing of implementation as barriers – which have been exacerbated by the pandemic.
  4. Employers don’t necessarily feel qualified to evaluate if Jars is the optimal savings product to offer.
  5. The pilot Jars design is currently compatible only with ‘relief at source’ workplace pension schemes, which take contributions from the employee’s net pay.

Implementation of Jars and employee engagement

  1. The employer implementation experience is aligned with expectations, and is no more complex than other benefits.
  2. Building employee engagement requires communications to be timely, multi-channel and frequent.

Points to consider

  • Methodological strengths/weaknesses: This is a qualitative evaluation and, as the authors state, involves a relatively small sample size so insights at this stage should be treated as indicative rather than definitive.
  • Generalisability/ transferability: The evaluation will be most of interest to policymakers, employers and benefits providers looking to design and implement workplace-based savings products, in particular targeting the high proportions of people in the UK who do not have an emergency savings buffer.
  • Relevance: This evaluation is specific to this savings tool, and to the pensions and savings market in the UK

Key info

Client group
Activities and setting
Payroll savings product which enables employees to build an emergency savings pot alongside defined contribution pensions saving – known as a sidecar savings model
Programme delivered by
NEST, Blackrock, MaPS, JP Morgan Chase; Salary Finance and Yorkshire Building Society.
Year of publication
United Kingdom
Contact information

Annick Kuipers, Jo Phillips and Will Sandbrook, Nest Insight;

Victoria Foreman, Emily Fu, Isabel Gill, Carol McNaughton Nicholls and Phoebe Ward, BritainThinks;

Roxana Prisacaru, the Money and Pensions Service (MaPS)