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More employers are adding emergency savings accounts to employee benefit programs, reflecting a desire to attract and retain workers and help them better prepare for unexpected expenses.
Under way since before the pandemic, the trend has picked up steam in recent months, with companies encouraging employees to fund emergency accounts, in some cases by offering them cash and other incentives.
“Employers are aware that if you can’t cover your day-to-day expenses, you’re not going to save for long-term goals, such as retirement,” said Leigh Phillips, CEO of nonprofit SaverLife, which rewards users who participate in activities including savings challenges with chances to win prizes of as much as $10,000. Emergency savings, typically three to six months of expenses held in cash, is “the way to start someone with a saving habit.”
SaverLife’s 500,000 users include some who participate through employers. In July, KFC’s nonprofit KFC Foundation began offering workers up to $240 over six months to match contributions to an emergency savings account.
Employers are taking action, in part, because the pandemic “highlighted how unprepared many Americans are for financial emergencies,” said David Amendola, senior director at consulting firm Willis Towers Watson .