Less than one-in-10 (8 per cent) workers have opted out of the new automatic savings option introduced by Cushon and the University of Lincoln to help those excluded from pensions to build a savings buffer.

The initiative initially contractually enrolled student employees at the university into a savings product with the employer as with pensions.

In the first academic year, a total of 1,012 students were automatically enrolled in the scheme, with an 8 per cent opt-out rate in line with average UK pensions opt-out rate.

Under the initiative, student employees working for the university are auto-enrolled into a savings pot, provided by Cushon, from where they can choose to move to an individual savings account (ISA) of their choice.

The scheme defaults them to a 3 per cent of salary contribution, with the university contributing 6 per cent, although they can choose to pay in more and the university will also increase their contribution up to a maximum of 8 per cent.

Cushon and University of Lincoln launched the initiative after research found that less than a quarter (24 per cent) of people feel positive about their financial future, while more than half (54 per cent) said the rising cost-of-living means they are unable to save as they want.

However, a survey of the student employees found that nearly half (46 per cent) are now saving for the first time as a result of the initiative, while nearly half (42 per cent) said they now feel more positive about their finances.

Around four in 10 using the Cushon app to check on savings every week, while six in 10 said the experience improved their thoughts and feelings surrounding campus jobs.

Cushon director of policy and research, Steve Watson, commented: “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.

“Despite it still being early days, the initial results are extremely positive, with opt out rates in line with pension auto-enrolment levels. And we’re hoping this will really set the tone for getting young people engaged financially for the rest of their lives.”

Adding to this, University of Lincoln head of reward and deputy director of HR, Ian Hodson, 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 being 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.”

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