Defaulting workers into a savings scheme

Defaulting workers into a savings scheme

Defaulting workers into a savings scheme whereby a portion of their wage is automatically saved at the end of the month. Additional matching incentives can also be offered to stimulate additional savings. The automatic feature can eliminate hassle as savings become automated and incentives entice additional savings. This can be applied to any organisation that pays employees via wired bank transfers.

Behavioral tools:

Default: Providing default option that will come into force if no other active choice is made.

Incentive: Designing cost-effective incentive schemes as people tend to avoid losses rather than seek gains.