By the end of 2023, one million UK households are set to run out of savings entirely.1 The economic pressures on the country’s workforce resulting from the pandemic and Russian invasion of Ukraine, among other factors, are immense. Without savings – both immediate and pension savings – individuals are completely vulnerable to unforeseen expenditures, often leading to reliance on debt and a spiralling negative financial situation. This can subsequently lead to mental illness, poverty, homelessness, productivity losses and immense suffering.2 Savings constitute a key pillar of financial resilience; their absence is a key predictor of financial hardship in the future.
While acknowledging the impact of today’s difficult economic circumstances, there are also behavioural biases which inhibit employees from saving for the future.3 Employers have a crucial role to play in supporting employee financial wellbeing, particularly by making saving as easy as possible for their workforce. The goal of this project was to develop an evidence-based platform to support employees in building greater financial resilience, which makes it as easy as possible for employees to build savings and contribute meaningfully to their workplace pension.
PayCaptain provides a payroll solution which helps employees build their financial resilience. By integrating savings (both liquid and retirement) into the payroll process, PayCaptain is building a frictionless and personalised journey to a more financially secure present and future for employees. PayCaptain had already leveraged many evidence-based principles in the app for supporting employees to save, using learnings from other Behavioural Insights Team financial resilience projects.
The Behavioural Insights Team (BIT) assisted PayCaptain with the design of their new set of features, SmartPay, within their Payroll app and conducted two rounds of user testing to understand the sentiments of existing and potential users towards the app in helping them achieve financial resilience. There was a particular focus on the savings element of SmartPay, given the important role of savings in building financial resilience over time as outlined above. There are lessons from SmartPay itself and the findings of this project to benefit both the wider payroll industry and employers in supporting the financial resilience of employees through the payroll process. Providing payroll savings products which truly work at increasing employee wellbeing requires testing, user feedback, and a deep engagement with the behavioural barriers to saving.