“My Government will also bring forward proposals to create Saving Gateway Accounts to encourage people on lower incomes to save more by offering financial incentives.”
The purpose of the Bill is to:
Provide a financial incentive to save among some of the poorest in society.
The main benefits of the Bill would be:
The Saving Gateway Accounts Bill will create a new national scheme that aims to kick-start a saving habit by offering incentives to save to around 8 million people on lower incomes, enabling them to plan for the future and cope with financial pressure, and to promote financial inclusion by encouraging people to engage with financial institutions such as banks, building societies and credit unions.
To provide a strong incentive to save, the Government will contribute 50p for each pound saved in the scheme. Savers will be able to build up Government contributions of up to £300 by saving in Saving Gateway accounts. In pilots carried out between 2002 and 2007, over 22,000 people took part, achieving over £15 million in savings.
The main elements of the Bill are:
- · Establishing a national Saving Gateway scheme, as announced in Budget 2008, and giving HM Revenue and Customs the necessary powers to administer it, including to approve providers of the scheme.
- · Permitting financial institutions to offer and operate Saving Gateway accounts and setting out the duties of those that choose to do so. The Government announced at the Pre-Budget Report 2008 that Saving Gateway accounts will be available through the Post Office.
- · Defining who will be eligible to open Saving Gateway accounts, and enabling the Government to make a contribution to savers at account maturity, for every pound saved in the scheme. The scheme will be open to individuals in receipt of qualifying benefits and tax credits namely: Working Tax Credit or Child Tax Credit, with income below a specified level; Income Support; Jobseeker’s Allowance; Incapacity Benefit; Employment and Support Allowance and Severe Disablement Allowance.
Related documents:
- · The Saving Gateway: operating a national scheme, HM Treasury, March 2008.
- · Final evaluation of the Saving Gateway 2 Pilots: Main Report, Institute for Fiscal Studies and Ipsos MORI Social Research Insititute, May 2007
- · Incentives to save: encouraging saving among low-income households, Bristol University Personal Finance Research Centre, March 2005.
All available from www.hm-treasury.gov.uk/saving_gateway.htm
Devolution:
The Bill applies to all of the UK.
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