Around the world, policy makers and researchers are launching a range of initiatives designed to encourage, on the one hand, short-term liquid savings, and on the other, illiquid savings for retirement. These two types of initiative are generally undertaken in isolation, often leading to a tension between liquid and illiquid savings. The implicit message is that long- versus short-term savings is a zero-sum game, where each type of savings is competing for a fixed share of individuals’ assets.
About the project
Recent work has challenged this perspective. Researchers in the US have proposed an approach that combines liquid and illiquid savings in a way that’s optimised around the needs and preferences of the saver. The argument is that an appropriate balance of liquidity will enhance people’s overall financial wellbeing, both in the short term and through into retirement.
- Who sign ups to use the savings tool? What levels of participation do we see? Does it attract new savers?
- How do people use the savings tool? How much do they save? How often and why do they withdraw money from their emergency savings? And does it help them to save more for retirement?
- Does the savings tool have a positive impact on workers’ financial resilience and wellbeing?
Watch our video to find out more:
This trial is supported by BlackRock, the Money and Pensions Service (MAPS) and JPMorgan Chase. The research is being led by Nest Insight, working with academics Sarah Holmes Berk, John Beshears, James Choi, David Laibson, and Brigitte Madrian as well as MaPS. Salary Finance is the trial’s savings technology partner, providing the savings tool which will be introduced in participating workplaces as ‘Jars’. Jars allows employees to set up regular payroll deductions to save money into their emergency savings jar, provided by Yorkshire Building Society, and, when they reach their savings target, to save more into their existing workplace pension.
You can find out more about the sidecar model and our research trial in the following blogs, press releases and Nest Insight publications:
- Supporting emergency saving – policy considerations and questions for future research (PDF) Published October 2020
- Nest Insight shares early findings from sidecar savings trial (press release) October 2020
- How will Nest Insight’s sidecar savings trial work? (blog) Updated November 2018
- Nest Insight launches its sidecar savings trial (press release) Published November 2018
- Liquidity and retirement savings: what’s the right balance (PDF) Published March 2018
- Liquidity and sidecar savings discussion paper (PDF) Published November 2017
Interested in taking part?
If you’re interested in taking part, and would like to find out more, please contact Jo Phillips: firstname.lastname@example.org