By Michael Royce, Nation of Savers policy lead for the UK strategy for financial wellbeing, Money & Pensions Service

Helping people build their savings may seem counterintuitive in the current economic climate, but there is always a case for encouraging people to put aside what they can afford when they can afford to do so to enhance their financial security.

Between now and 2030, Nation of Savers is focused on increasing by two million the number of people of working age on low to modest incomes who save regularly. These are people that have the means to save yet aren’t already putting money aside as regularly as they can. We want people to build accessible savings pots that they can draw on in times of need to help meet unexpected costs or bills. This is because having a savings buffer enhances a sense of financial security and has a positive impact on people’s mental and wider wellbeing.

To achieve our target of two million new savers, we must work with partners in financial services, government, and workplace or community settings. We are doing this based on three core recommendations.

Recommendation #1 – expand provision of payroll-deducted savings schemes.

Workplace is a channel to reach people at scale in order to offer them the means to save by default alongside managing their money and pensions in other ways. With partners, we are testing “autosave” models of workplace savings, where the default is for the employer to enrol the employee into a workplace savings scheme automatically unless the employee actively chooses to opt out. We are seeing dramatic increases in employee participation rates with autosave. Alongside this research, we are engaging government, providers, and employers about ways to scale provision of workplace savings, either through autosave or opt-in models.

Recommendation #2 – increase take-up of Help to Save and our understanding of incentivised saving.

The government’s reward-based Help to Save scheme is targeted at people on low incomes. The account, provided by NS&I, stays open for four years, offering a 50p reward for each £1 saved on savings of up to £50 a month.

Once the account matures then the saver must transfer the funds to a nominated deposit or another savings account. For both new and maturing Help to Save accounts, it’s a good opportunity to keep the savings message front of mind for people who can afford to do so.

We’re also interested in working with financial services to understand how we can use prize or reward-based incentives beyond interest rates to encourage savings among the working age population on low to modest incomes.

Recommendation #3 – work with financial services to create a savings charter.

To help us achieve our target of two million more savers, we are working with financial services providers to create a savings charter. The primary purpose of the charter is to raise the profile of savings in the retail or community-based activities of its signatories. It will provide a means for building societies, credit unions, banks, and fintech providers – either alone or in partnership – to consider the savings needs of working-age people on low to modest incomes.

To find out more, visit: www.moneyandpensionsservice.org.uk/uk-strategy-for-financial-wellbeing

The views, opinions and positions expressed within guest blogs are those of the authors and do not necessarily represent those of the BSA.