Two Pay Packets for Pay and Savings

Published / Last Updated on 15/04/2019

Credit where credit is due, a report this week online at the BBC, written by Kevin Peachey, highlighted a recent work trial took place in India with a group of low-paid workers, to encourage people to save.

The workers were given two pay packets, in one was their pay and the other was cash with the words savings on the envelope.  The study also placed a picture of the workers child or children on it to stop them from dipping into it.

Wagestream a Financial Technology company is also using a similar technique in which they let workers take out pay from their wages and put it into a savings pot.  The app allows the consumer to put a picture of what they are saving for on it and if they start to dip into the money the picture starts to disappear.

A recent study by the Financial Conduct Authority (FCA) revealed that 1 in 6 could not cope if their rent or mortgage went up by £50.00 a month.

The government Help to Save scheme has not done much to change our saving attitude, even with the 50% bonus offer.  They have only half the expected level of savers predicted by the Office of Budget and Responsibility (OBR).

The Money and Pensions Service (MAS), wanted to find new ways of getting the nation saving, in recent talks with the Behavioural Insights Team (BIT) or also know as the Nudge Unit.    They came up with 244 saving ideas including how to manage debts and guidance tips, they chose 17 for trials.   Feel that using latest technology and reminders will help the UK back on the savings track.

Comment

In a video this week we highlighted the need to tap into what we do habitually and by using Behavioural Science to do this, we can plug the Savings Gap.  The more savings opportunities are in front us of and easier to 'zip' the odd £5 across to savings the more frequently it will happen and ultimately become habit forming.  We call it Behavioural Saving.

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