On the go: An automatic savings alternative for those ineligible for auto-enrolment has been trialled by Cushon and the University of Lincoln, leaving almost half (42 per cent) of members feeling more positive about their financial situation.
The alternative caters specifically to young people who are not yet eligible for auto-enrolment. The trial saw 1,012 students automatically enrolled into the scheme, of whom only 8 per cent chose to opt out — which Cushon pointed out was a similar rate as traditional pensions.
The scheme is open to student employees working for the university, who were auto-enrolled into a savings pot provided by Cushon that could later be moved to an individual savings account of the student’s choice.
The default option is a salary contribution of 3 per cent, with the university offering 6 per cent, though members could elect to pay more and the university would increase its contribution in turn up to a maximum of 8 per cent.
Besides the ability to opt out, those students who are eligible for traditional auto-enrolment are automatically switched to the university’s pension scheme.
A survey encompassing around 10 per cent of students enrolled in the scheme found nearly half (46 per cent) were saving for the first time, and a similar number (42 per cent) said they felt more positive about their finances as a result.
Four in 10 students used Cushon’s app to check their savings at least once a week, while six in 10 said the experience improved their view of campus jobs.
Cushon’s director of policy and research, Steve Watson, said: “We must ensure that everyone in society is set up for a secure financial future. Working with University of Lincoln, we have been helping achieve this by contractually enrolling working students into a workplace savings scheme with great success.
“Just like a pension they have the choice to opt out, and if their circumstances change and they do ever meet the pensions auto-enrolment regulations, they can be easily switched over into the pension scheme.”
He added that despite it being “early days”, the initial results were “extremely positive”, citing the fact opt-out rates were in line with traditional auto-enrolment levels.
“We’re hoping this will really set the tone for getting young people engaged financially for the rest of their lives,” Watson said.
Ian Hodson, head of reward and deputy director of HR at University of Lincoln, said: “We’ve been working hard so that our students can find savings vehicles relevant for them to engage with.
“We genuinely believe that the work we’ve been doing with Cushon could change the way in which young workers and society in general view saving.
“In the current climate, this initiative has been crucial in helping our young workers build up a savings pot. It’s important that we don’t let the momentum drop and we will continue to teach our student workers about the importance of saving for future financial resilience.”
