Brown: We will match low-income savers

Gordon Brown has announced plans for a new savings scheme for low-income Britons.

In today's draft Queen's Speech, the prime minister set out plans for the government to match people's savings.

He said: "The Queen's Speech will also introduce a savings bill to help homeownership and wealth ownership generally - giving eight million people on low incomes access to a national savings scheme, with each pound saved matched by a contribution from the government."

The Savings Gateway scheme was first introduced in the last Budget and the new bill will give HM Revenue and Customs the powers to administer it and approve savings providers.

The scheme will open in 2010 – with the first matched payments from the government paid in 2012.

It is anticipated the eight million people eligible for the scheme will include those receiving certain benefits and tax credits.

"The scheme aims to kick-start a saving habit among 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," the government outline of the bill stated.

In pilots that took place between 2001 and 2007, over 22,000 people participated saving over £15 million.

Kate Green, chief executive of Child Poverty Action Group, welcomed the new savings scheme.

She said: "The savings gateway extension may help protect families who may otherwise get into debt."

Daniel Barnes