Savings Gateway set for national roll-out
Wednesday, 12 Mar 2008 15:45
Lower-income households will be encouraged to save
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The government will roll out its Saving Gateway scheme across the country in a bid to encourage saving in lower-income households.
The scheme, which was first piloted in 2001 with Halifax, sees the government matching savings, up to a monthly limit of £25.
Although the actual amount to be matched has not yet been agreed, pilot schemes tested match rates of 20p, 50p and £1 per £1 saved.
The collapse of Farepak in 2006 underlines the importance of regulated savings schemes for those on lower incomes, the government said.
Responding to the announcement, Adrian Coles, director-general of the Building Societies Association commented: "We hope the government can be persuaded to increase the size of the market by allowing as many people as possible to participate, not just those on benefits or tax credits. A high match rate will also be needed to maximise saver participation."
Accounts will be available from 2010 and will run for two years. The accounts will be available to those on benefits and tax credits.
At the end of the accounts, the government will make a contribution for each pound saved and will allow the accounts to roll over into ISAs.
The scheme will be available to around eight million individuals, according to the government.