Nudging long-term saving: The Ahorra+ program

Abstract

This paper analyzes the effectiveness of a nudging mechanism adapted from Save More Tomorrow (SMART) by Benartzi and Thaler (2004). The goal of this mechanism was to promote long-term saving in a leading Spanish life insurance and pensions company in Spain. We analyzed the results of a pilot of the Ahorra+ program. This pilot was implemented in 2016 with 240 company employees. The program significantly increased voluntary saving, enabling employees to enjoy a better retirement by helping them save more for the future. Specifically, the average annual voluntary contribution to the pension plan increased by 86.5%, and the number of workers making voluntary contributions increased by 252.9%. The impact of Ahorra+ was greater among workers with the lowest savings: young people and low earners. The results of this field experiment confirm the effectiveness of using a default option to increase long-term savings patterns, even though the program targeted savers with high financial literacy and professional expertise in this area.