LONDON—Nest Insight’s Jo Phillips urged employers to take up more-effective opt-out savings programs as more people struggle under inflationary pressures in a recent article from The Guardian.
Jo Phillips, the director of research and innovation at Nest Insight, said that, in Nest Insight’s work with Suez, a recycling waste management company in the UK with more than 5,000 employees, workers were far more likely to contribute to savings through an opt-put program rather than an opt-in option.
Employees of Suez have been taking part in an automatic payroll savings trial. Each month £40 of a worker’s wages is moved into an easily accessible cash savings account before they are paid. They can adjust the default sum up or down.
“Our research shows that inertia, people’s tendency to keep doing what they’re already doing, is a strong barrier to participation,” said Phillips. Take-up of the previous opt-in workplace saving scheme was only 6%. Since it shifted to being an opt-out arrangement, that has risen to more than 40%.
Nest Insight is a partner in BlackRock’s Emergency Savings Initiative and the research arm of the UK government-established NEST (National Employment Savings Trust), a public company of the Department for Work and Pensions.
Nest Insight conducts rigorous, cutting-edge research, working collaboratively with industry and academic partners to understand the needs and behaviors of the new generation of savers created by the UK’s pensions auto enrolment system.