Pensions - Auto enrolment and the savings side car – further developments and a push for introduction

We wrote in the December 2018 edition of Law at Work about how The National Employment Savings Trust (NEST) (through its collaborative research unit Nest Insight) had set up a trial of a new savings scheme (now known as Jars) alongside automatic enrollment, to encourage employees to save, especially so that they can have back up funds in case of emergencies.   

In October 2020, Nest Insight published insight papers into its early findings from the trial with a number of ideas about how the savings vehicle might be put in place and operate from a policy and industry perspective. It also said that from January 2021, Nest Insight would "start the clock on two years of steady-state data gathering" which will form the basis of the final programme evaluation. The participating employers in the trial are Timpson, the University of Glasgow, BT, and StepChange. BT is the largest employer taking part, offering Jars to over 65,000 of its employees in the first instance.  However, the trial has also identified some challenges.  Indeed, Jo Phillips, the director of research and innovation at Nest Insight commented in October 2020, that 'as is the case with many savings tools or accounts offered on an opt-in basis, and without financial incentives, the voluntary sign up level is currently low.'  So incentivising take-up will presumably play a large part in the factors that will need to be looked at.   

Although it may take some time for the policy (and the logistics) to develop in this area, the growing support for the idea may bring forward its possible introduction.  In April, certain Conservative groups asked the Government to consult on it as part of measures to bring the “country back together and deliver a recovery that serves those most hurt by the pandemic”.

Nest Insight has and will be publishing further papers exploring the experiences of employers and employees who have participated in Jars so far.  We will, of course, closely monitor developments and will provide updates when available, particularly where they will impact what employers have to provide in the workplace.