Liquidity and workplace pensions: sidecar savings trial

Around the world, policy makers and researchers are launching a range of initiatives designed to encourage, on the one hand, short-term liquid savings, and on the other, illiquid savings for retirement. These two types of initiative are generally undertaken in isolation, often leading to a tension between liquid and illiquid savings. The implicit message is that long- versus short-term savings is a zero-sum game, where each type of savings is competing for a fixed share of individuals’ assets.

About the project

Recent work has challenged this perspective. Researchers in the US have proposed an approach that combines liquid and illiquid savings in a way that’s optimised around the needs and preferences of the saver. The argument is that an appropriate balance of liquidity will enhance people’s overall financial wellbeing, both in the short term and through into retirement.

Towards the end of 2018, we officially launched a UK research trial to test the impact of a combined savings tool, often referred to as the ‘sidecar savings model’, where a liquid ‘emergency savings’ account is linked to a traditional defined contribution pension pot. This hybrid savings tool was offered by participating employers in the workplace. Contributions were deducted automatically through payroll and managed to create an optimal level of liquid emergency savings, while also increasing long-term savings.

The trial was supported by the BlackRock Foundation, the Money and Pensions Service (MaPS) and JPMorgan Chase. The research was led by Nest Insight, working with academics Sarah Holmes Berk, John Beshears, James Choi, Jay Garg, and David Laibson, as well as MaPS. Salary Finance was the trial’s savings technology partner, providing the savings tool which was introduced in participating workplaces as ‘Jars’. Jars allowed employees to set up regular payroll deductions to save money into their emergency savings jar, provided by Yorkshire Building Society (YBS), and, when they reached their savings target, to save more into their existing workplace pension. The savings tool was trialled in UK workplaces: BT, ITV, StepChange, Timpson and the University of Glasgow

Programme partners


BlackRock is a global investment manager serving the UK market for more than 30 years with a purpose to help more and more people experience financial well-being. BlackRock’s Emergency Savings Initiative is made possible through philanthropic support from the BlackRock Foundation. The initiative brings together partner companies and non-profit financial health experts to make saving easier and more accessible for low- to moderate-income people across the US and UK, ultimately helping more people to establish an important financial safety net. For more information, visit: blackrock.com/corporate/about-us/social-impact

The Money and Pensions Service (MaPS) vision is: ‘everyone making the most of their money and pensions’. MaPS is an arm’s-length body committed to providing access to the information and guidance people across the UK need to make effective financial decisions over their lifetimes. For more information, visit maps.org.uk

JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $4.0 trillion in assets and $285.9 billion in stockholders’ equity as of March 31, 2022. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at jpmorganchase.com

Delivery partners

Salary Finance’s mission is to help millions become financially healthier and happier. They do this by partnering with employers to provide a holistic suite of salary-linked employee financial wellbeing benefits. Their comprehensive, award-winning benefits offering currently reaches over 4 million employees within 550+ of the UK’s largest employers including Tesco, Royal Mail, BT, the NHS and 20% of the FTSE 100. For more information on Salary Finance’s solutions for helping employees to get out of debt, start saving, advance their pay, protect their future and learn better financial habits, visit: salaryfinance.com

Yorkshire Building Society is a mutual organisation, owned by its members and customers. It’s driven by social purpose and here to serve its members. It’s proud of the difference it makes to people’s lives by helping them to achieve their goals. It’s here to create long-term member value, help people have a place to call home and support them towards greater financial wellbeing. It believes that helping people with these goals is how it can make the biggest contribution to society. For more information visit: ybs.co.uk

Our research

Research objectives

Over the course of the trial, we examined the impact of the savings tool and followed workers on their savings journey to measure:
  • Who signs up to use the savings tool? What levels of participation do we see? Does it attract new savers?
  • How do people use the savings tool? How much do they save? How often and why do they withdraw money from their emergency savings? And does it help them to save more for retirement?
  • Does the savings tool have a positive impact on workers’ financial resilience and wellbeing?

Research methodology

The trial design brought together different research methodologies to address the research questions comprehensively including:

  • Analysis of administrative data – account data collected by Salary Finance and YBS allowed us to look at account usage and saving behaviours including deposits, balances and withdrawals over time.
  • Regular employee and comparison group surveys – measuring self-reported financial wellbeing and responses to the Jars proposition.
  • Qualitative research with employees – research interviews allowed us to gain a deeper understanding of questions like how Jars fits into the wider financial and life contexts of users, and how Jars might best be communicated to build awareness and engagement.
  • Qualitative research with employers and other stakeholders – exploring implementation considerations and questions like why employers might choose to offer or not offer Jars.