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For the list of well-meaning government schemes that may not succeed, we have another contender.
The government has launched a new drive to encourage workers to build up emergency savings through payroll schemes, arguing that millions of Britons remain financially vulnerable to unexpected costs.
On the face of it, the idea is difficult to oppose.
The newly announced National Coalition for Workplace Savings brings together employers including Co-op, Next and other major businesses in an effort to make saving as routine as pension contributions. Ministers hope that allowing workers to put money aside directly from their pay packet will help create a culture of regular saving and improve financial resilience.
The challenge it seeks to address is real. Around one in 10 working-age adults have no savings at all, while a further one in five have less than £1,000 available for emergencies. For households facing an unexpected boiler repair, car breakdown or period of unemployment, that leaves little margin for error.
Logic behind workplace saving is straightforward.
Automatic pension enrolment has dramatically increased retirement saving by making contributions effortless. Advocates hope the same behavioural nudges could encourage people to build emergency funds without having to actively transfer money into savings accounts each month.
Experts broadly welcome the initiative. Charlene Young, senior pensions and savings expert at AJ Bell, described an emergency fund as a “crucial component of financial resilience” and said workplace schemes could remove much of the friction involved in researching and setting up savings accounts.
Ian Futcher, financial planner at Quilter, said payroll saving could make it easier and more automatic for people to build a financial buffer, in much the same way auto-enrolment helped normalise pension saving.
But there is a risk that policymakers are mistaking a symptom for the cause.
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Britain is hardly short of savings products. Consumers already have access to ISAs, Premium Bonds, National Savings & Investments accounts, Help to Save for lower-income households and a vast range of easy-access and fixed-rate savings accounts offered by banks and building societies.
The problem is not necessarily that people lack places to save. It is that many lack spare money to save in the first place.
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Recent data from the Office for National Statistics illustrates the scale of the challenge. Average household spending rose to £676.60 a week in 2024-25, increasing faster than inflation as families absorbed higher costs for essentials such as housing, energy and food. Those pressures fall most heavily on lower-income households, which spend a greater proportion of their budgets on necessities.
AJ Bell estimates that rising spending means households may need almost £1,000 more in emergency savings than previously, implying a typical rainy-day fund of between £6,666 and £13,332 to maintain the commonly recommended cushion of three to six months’ essential expenditure.
That creates an uncomfortable reality for policymakers. Encouraging better financial habits may help at the margins, but habits alone cannot generate money that households simply do not have.
The government’s argument is that workplace schemes can make saving easier when budgets are stretched. Rachel Blake, the economic secretary to the Treasury, said the initiative would help more people build regular savings habits and a financial safety net.
Yet, even supporters acknowledge there are limits to what payroll saving can achieve. Ms Young noted that while the coalition’s reach is significant, “there’s no guarantee” workplace schemes will lead to higher savings rates or help people save enough in the face of rising costs.
There are also practical questions about whether workplace savings schemes will always offer the most competitive home for savers’ money.
Mr Futcher pointed out that depending on how payroll savings are structured, some consumers may find better rates or more tax-efficient options elsewhere, particularly through ISAs.
More fundamentally, the initiative highlights a broader dilemma in Britain’s finances. Financial resilience is often framed as a question of behaviour — saving regularly, budgeting carefully and planning well.
But for many households, it is increasingly a question of income.
Even Mr Futcher, while supporting efforts to increase saving, argued that the deeper issue is Britain’s “distinct lack of financial education”. Better financial literacy would undoubtedly help some households make better decisions.
That said, education and behavioural nudges can only go so far.
Private Eye recently skewered a debate about why people fail to increase pension contributions with a simple answer: because they do not have the money. The same critique could be applied here.
The National Coalition for Workplace Savings may well help some workers build healthier financial habits. It may encourage thousands of people to put aside money they would otherwise have spent.
But if wages continue to struggle against housing, energy and everyday living costs, the government’s latest savings initiative risks running into the same obstacle as many of its predecessors.
People simply cannot save money they do not have.
