BlackRock has announced several new inductees to its philanthropic Emergency Savings Initiative (ESI), which is intended to boost access for low-cost, friction-saving products for financially vulnerable Americans, a press release said.
The five new companies joining ESI – ADP, Best Buy, Self, Truist and Varo – will be working on new savings programs to help improve safety nets. According to the release, BlackRock’s ESI will work with those companies to innovate and scale savings solutions to help build up defenses against financial shocks. With ESI, BlackRock has invested $50 million to help lower-income people access savings tools and strategies.
“It’s clear that widespread economic insecurity is not a result of individual choices, but rather structural barriers that often make financial stability an unreachable goal,” said Deborah Winshel, global head of social impact at BlackRock and president of the BlackRock Foundation. “We’re ensuring that savings solutions are tailored to the financial lives of low- to moderate-income households, and our growing coalition of partners can help us put these solutions into the hands of even more people who have faced systemic barriers to financial security.”
Emergency savings were instrumental over the past year, helping people through various issues like loss of income due to the pandemic and increases in healthcare needs. Those without emergency savings often found themselves in difficult situations that could ultimately leave them worse off financially in the future. A survey quoted in the press release found that people without liquid emergency savings would be twice as likely to take an early withdrawal or 401(K) loan to make ends meet.
A report from PYMNTS found that consumers globally had been doing well on stocking up savings, with the global total at somewhere around $5.4 trillion. That means spending could increase now that the world is beginning to reopen.