Whilst offering payroll savings is a great first step, behavioural barriers (e.g., inertia, present bias) can deter people from signing up. In this project, we tested solutions to overcome these barriers. The most effective solutions included:
- Making it (seem) easy to sign up – by using an ‘soft default’ email subject line ‘we’ve set up an account for you’, we highlighted how easy it is to set up an account and start saving. The soft default email led to a 4-fold increase in people signing up to save.
- Increasing the default savings setting to encourage higher levels of savings – due to inertia, people tend to stick to pre-set settings, therefore we set the default saving amount to a level users reported to be ambitious but realistic.
- Reminding people of the impact of starting small i.e., small savings every day can add up to a lot over a year and that can cover most unexpected expenses.
- Incentivising sign-ups with a £5 sign-up bonus and entry into a £1000 prize draw. The incentive tripled sign-ups during the first two weeks after they were announced.
We also found that people who signed up for payroll savings increased their confidence in managing their money and built a regular savings habit that created an initially small (but growing) savings buffer.