The COVID-19 crisis had taken a significant toll on the personal finances of tens of millions of Americans, with 25% reporting that they have no savings whatsoever. Our team felt compelled to help find a solution to this persistent problem, magnified and made worse by the pandemic. We set out to build the first purpose-built emergency savings solution to help people save automatically and to help them feel and be financially secure.
When we launched SecureSave six months ago, there were many who were eager to see if emergency savings accounts would work. Many worried employees wouldn’t use it as they simply could not afford to save, others thought focusing on emergency savings would reduce long-term retirement savings, or that any dollars matched by the employer would quickly be spent by employees. But after working with employers for the past six months, we’d like to share some of our data.
With our initial deployments, we hit adoption rates north of 30% and as high as 63%, and these rates have stayed consistent. Employees gravitated to the idea of emergency savings, and we hit these high adoption rates within days of introducing SecureSave. Easy onboarding was also really important, with our signup process taking less than two minutes. The program is super easy to understand and explain to others. Employees were quickly able to understand the key features: their full control and accessibility to the program, and how their regular contributions are matched.
Employees that sign up for SecureSave are also using it to consistently save. In any given month, only 3% of employees are accessing some portion of their emergency savings. Additionally, over 98% of overall savings is being retained on a monthly basis. Our average user is saving $62 per month and, based on the low withdrawal rate, we would expect the average user to reach a balance of $2500 in 35 months. Put another way, for every $35 that is saved into SecureSave, we are only seeing $1 go out. We’ve also seen that 20% of people increase their savings during signup. And even after users declare an emergency and withdraw funds, the vast majority continue the automatic deferral from their paycheck.
Six months ago, a potential concern was that saving for emergencies might come at the expense of long-term savings. So far, we have seen no sign of this. We asked participating employers if they had noticed a significant increase in 401(k) deferral rates after deploying Secure. Their answers were all a resounding ‘no.’ After deploying Secure for the first time, only 2.6% of employees reduced their deferral. This is well within the normal range of ongoing changes, meaning Secure did not cause an outsized reduction.
One company, with an average employee salary of $55,000, offered Secure as a companion to their 401(k), and budgeted an annual $100/employee match for SecureSave. Employees received $25 upon enrollment, and a $3/payroll match. This company paid $750 in setup fees and $3 per month for participating employees to SecureSave to cover program administration. Of the 200 total employees, 106 of them were US-based and eligible, and received their invitation via email. We saw a 63% adoption rate among invited employees in less than 2 weeks. 82% linked their bank account, then, 23% of those employees increased their payroll withholding above the minimum.
Now that we’re six months in, what might you expect from us in the future? Well, we’re taking feedback from users about SecureSave’s impact on their stress levels, and we’ll make changes based on that. In 2020, 41% of people cited concerns over emergency savings as their top financial worry. From what we’ve heard so far, SecureSave has empowered employees to regain control over their savings and stress less. When employees are less stressed, especially over their finances, they’re much more productive.
Through SecureSave’s app, we are able to collect data on which emergencies our users face. So far, they have withdrawn funds for a variety of reasons, reassuring us that Secure was there for them no matter what. This type of data has helped us provide users with additional, external resources that may be helpful in their situation. Overall, employees enjoy resources tailored to their needs and situations.
Emergency savings is a foundational element of long term financial health. Employees love Secure’s automated saving features, as well as the sense of security they get from having full access and control. We help them build and maintain a good habit, then stay connected with them to ensure we are there when the unexpected occurs. Our mission is to help people feel financially secure. This round of data shows that we are well on our way to helping people be more financially secure.
We look forward to sharing more updates and case studies as we gather them. If your team is interested in getting the latest, feel free to send me a note at Devin@securesave.com or reach out to our team.