New Government Supported Saving Scheme For Those on Low Incomes

suzyq

From July 2010 a new government supported cash saving scheme will commence, it is aimed at people on a low income to encourage them to save. You need to have the account open for 2yrs. Then the government will reward you with a further50p for each £1 saved, the maximum monthly amount you can save is £25.
See the attached link http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/SavingsAndInvestments/DG_10010450

cashbackproblems

Great idea to help lower incomed people who would otherwise waste it on cider, fags and booze! However if the Tories get in i wouldnt expect schemes like this to be extended or started.

lvader

Typical Labour, raise main taxes like NI and come up with silly schemes likes this which will no doubt cost more to run than what people gain in benefit. I bet some consultant got very well paid for comming up with this 'brilliant' idea.

afwone

suzyq wrote: »

From July 2010 a new government supported cash saving scheme will commence, it is aimed at people on a low income to encourage them to save. You need to have the account open for 2yrs. Then the government will reward you with a further50p for each £1 saved, the maximum monthly amount you can save is £25.
See the attached link

I am pleased to see this scheme. A disabled friend of mine who is as poor as a church mouse told me that an ISA she has had for several years was paying 0.2% interest. I shall tell her about it.

I also like the website you link to. A useful source of clear information. There is a tendency for people to trust their bank or building society with advice on savings. All too often these institutions are only too happy to abuse that trust.

cashbackproblems

lvader wrote: »

Typical Labour, raise main taxes like NI and come up with silly schemes likes this which will no doubt cost more to run than what people gain in benefit. I bet some consultant got very well paid for comming up with this 'brilliant' idea.

Its benefiting those groups who otherwise wouldnt save as if they put in a measly £25 p/m + 50p per pound over 2yrs that amounts to £900 which is going towards them becoming less reliant on the state in the long run, its a practical incentive which the Tories wouldnt extend/introduce as they dont give a s*** about lower earners.

NI rise = xtra £15 p/m per person, which is a much needed income stream that labour have been honest about and will reduce the deficit.

Im not a labour supporter and never have voted for them but annoys me when people dismiss these kinds of changes that make a real difference and labour has made alot of good improvements in public services over the yrs in my area, changes iv seen first hand.

hayley11

I read about this scheme ages ago, i'm sure it was a couple of years ago. I'm not saying it's been around for that long but I know I read something about it then. Personally I think it's a good idea, it's not a huge amount of money but I think anything that encourages people to save is a good thing.

lvader

cashbackproblems wrote: »

NI rise = xtra £15 p/m per person, which is a much needed income stream that labour have been honest about and will reduce the deficit.
.

It will not reduce the deficit, both spending and the deficit are due to go up next year.

TRUSt_NO_1_2

the detail..

http://www.hm-treasury.gov.uk/saving_gateway.htm

ok it may have cost a fortune to set up, but if poorer people can afford it, it will give them some self esteem and hopefully a few quid in their pocket.
Hopefully 'the essentials' inflation stays below 25%,so they will gain in real terms.
The cost for the government contribution...£300 million ? ...buttons ...

the catch ?....

The prospective benefactors will vote Labour....damn my synacism.

..and if they don't vote labour ...will it still happen ?

atypical

TRUSt_NO_1 wrote: »

The cost for the government contribution...£300 million ? ...buttons ...

Buried in a report somewhere:

• 8m people eligible in 1st year, extra 1.9m every year thereafter
• Government estimates 20% uptake within 3 years of becoming eligible
• Based on that Government contributions will total £130m in 2012-13; £110m in 2013-14; and £100m in 2014-15. Fall to £60m per year in steady state.
• Will cost HMRC £20m over 5 years to set-up and operate

8m people is a lot more than I would have expected. That's ~13% of the UK population.

ManAtHome

It would be bu**er all in set up costs to increase basic tax allowances instead of freezing them (think that's a Lib Dem idea though - probably uncosted and will lead to closure of skoolsunospitals).

Wonder why this latest wheeze is scheduled from July - not...!

opinions4u

The value of the incentive is great for the saver.

The massive flaw with this is that the people it's targeted at are on benefits. They really shouldn't be in a position where they can afford to save.

The real cynic in me says that the level of benefits is probably too high if they've got the spare cash to bang in to this scheme.

If 8m people really do qualify for this, I have two comments to make:

1) As a nation we have fewer people working in the private sector generating wealth for the country than we have on benefits / working in the public sector. That really is an appalling way to run a country.

2) The overwhelming majority will not be willing/able to save anyway, so the incentives provided will merely be paid to those who already do save.