The National Employment Savings Trust has launched a trial with retailer Timpsons to test how its sidecar savings model works.
In a sidecar structure, contributions over and above the auto enrolment minimum are designed to create an optimal level of liquid savings while also maximising long-term savings.
The trial will explore whether the sidecar savings model can improve workers’ financial resilience today and in retirement by creating an optimal level of savings.
The retailer will be the first employer to roll the trial out within their organisation of over 5,600 workers.
Workers participating in the trial will be monitored for two years to assess sign-up rates, how much they save, and the impact on their financial wellbeing.
The JPMorgan Chase Foundation and the Money Advice Service will be providing support for the trial.
MAS will also be working with Nest Insight (the research arm of Nest) directly on the research, along with professor Brigitte Madrian and the Harvard Kennedy School.
The sidecar account will be provided by Salary Finance, working alongside a Nest pension pot.
According to research by the MAS, many UK workers are currently in a vulnerable position. Only 44 per cent of the UK working population have £500 or more in liquid savings to hand for emergencies, and 26 per cent have nothing.
MAS strategic lead on budgeting and saving Michael Royce says millions of adults who are financially squeezed or financially struggling lack a savings buffer to help them cope if they were to face an unexpected bill.
Royce adds he hopes the trial builds on emerging evidence that workplace savings initiatives can help people save more for the short-to-medium term and when they retire.