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National Savings Scheme Revealed
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(14-03-08) - An innovative national savings scheme for low income earners will be launched across the UK from 2010, Chancellor Alistair Darling has announced in the Budget. writes Dan Drage dan.drage@consumerchoices.co.uk |
The Savings Gateway will see every pound saved by people on low incomes topped up with an as yet unspecified contribution from the government. A total of eight million people on benefits and tax credits could be eligible for this two year scheme.
The scheme, mooted as long ago as 2001, has been piloted already in seven separate UK locations. A total of 22,000 participants took part, with up to 80% saving regularly, a figure well above the national average.
Those eligible for the scheme include people who receive working tax credits, child tax credits paid at the maximum rate, income support, jobseeker's allowance, incapacity benefit, employment and support allowance and severe disablement allowance. The Treasury has not said how much the government's contribution will be for every pound saved, but a £25 monthly limit is likely.
Mark Lyonette, chief executive of the Association of British Credit Unions, welcomes the scheme as a healthy alternative to reliance on credit:
‘To help people become more confident in managing their finances, and to reduce reliance on credit, it is vital that those on low incomes are able to save and build up their personal assets.’
Chris Eagle, Commercial Manager at CreditChoices, is equally as enamoured by this scheme:
‘One plus point to come out of this Budget is the development of the Savings Gateway. With more and more people being refused credit, the Savings Gateway offers an opportunity for low income earners to turn their financial situation around.’
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