Saving using SMarT saving service

The experiment utilizes a saving scheme where individuals were allocated to one of two groups. Individuals in the treatment group were given the choice to enroll in the SMarT savings service, where they must commit a portion of their future salary increases (3 percentage points per pay raise) toward retirement savings. Individuals in the control group were not offered the program.

Impact:

The percentage of monthly income allocated to retirement savings increased by 120% within five years of enrolment, compared to the control group. SMarT participants were, on average, saving 13.6% of their monthly income versus 6.2% for the control group.

Source:

Richard H. Thaler and Shlomo Benartzi. “Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving”, Journal of Political Economy, 2004, 112 (1), 164-187.