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:

1. due to its perceived ability to improve employees’ financial resilience.
2. . Pre-commitment to additional pension saving is seen as secondary aspect.
3. to initiate a savings habit.
4. to saving that employees face.

1. for offering a hybrid workplace savings tool.
2. is felt to demonstrate that an employer is responsible and forward-thinking.
3. – which have been exacerbated by the pandemic.
4. if Jars is the optimal savings product to offer.
5. , which take contributions from the employee’s net pay.

1. , and is no more complex than other benefits.
2. , multi-channel and frequent.

Points to consider

• 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.
• 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.
• This evaluation is specific to this savings tool, and to the pensions and savings market in the UK