New Government Supported Saving Scheme For Those on Low Incomes

rb10

Remember that it is not just for those on benefits - people who are employed but just low earners also qualify ("tax credits - but only if the final award for the 2009-10 tax year was based on a household income of less than £16,040").

These are people who should be saving a small amount, so maybe this is the encouragement that they need.

opinions4u

rb10 wrote: »

Remember that it is not just for those on benefits - people who are employed but just low earners also qualify ("tax credits - but only if the final award for the 2009-10 tax year was based on a household income of less than £16,040").

These are people who should be saving a small amount, so maybe this is the encouragement that they need.

Did this market segment all dive in to the 10% regular saver that Halifax offered a couple of years back? That was as good an incentive to save as has ever been offered commercially and they sure as hell didn't.

As with everything this government does, there will be a lot of noise made, a lot of money ploughed in to marketing it, a low take up rate and those who do take it up will deposit, withdraw and then take the incentive afterwards.

There isn't even a requirement to leave the money in there. "You can also take your money out if you need to, and you will still get a government reward on what you've saved". That's not saving, teaching people to save or encouraging people to save. As with every form of benefit the claimant will take what they can (legally) and that will be the end of it.

10_66

cashbackproblems wrote: »

Great idea to help lower incomed people who would otherwise waste it on cider, fags and booze!

What a patronising statement.

ACID

Agree with above
shame this forum is not modded else id that woudl be deleted instantly

i work biut to others who cannot get jobs dont just waste money
i suppose its the same as those who earn money and waste it at bars etc.

think before you type idiot!

dougz_2

Once you've opened your account, you can save as much as you like, up to £25 a month. After your account has been open for two years, the government will add a reward of 50 pence for each £1 you've saved. You'll only be able to open one Saving Gateway account in your life, so make sure you open one at a time that's right for you.


So basically this is just a one off handout of £300? At the end of the 2 years its game over, so take that bonus and run. How is that encouraging long term saving?

Presumably high earners are equally eligible for the £300 so long as they quickly apply when they happen to be momentarily unemployed. Yet many families reliant on child credits to keep them out of poverty can't ever have it. Crazy.

Owain_Moneysaver

TRUSt_NO_1 wrote: »

the catch ?....

As soon as you hit £6k of savings (which would only be a year's mortgage or rent for many families) you start getting benefits docked.

afwone

It is no bad thing for all sections of society to save.

Those who benefit from the ISAs are the more comfortably off, and especially those who can use them to avoid paying tax at 40 or 50%. There has not been a similar incentive for those on low income, and so I think the new scheme should be encouraged.

Interesting how some posters have little sympathy with those on low income, and are more troubled by the cost to the Treasury. The costs involved must be miniscule compared with those associated with running ISAs and the associated loss of tax revenue.

atypical

dougz wrote: »

So basically this is just a one off handout of £300? At the end of the 2 years its game over, so take that bonus and run. How is that encouraging long term saving?

There's also the argument that if they do continue saving they become disillusioned when they get real world interest rates of 3-4% rather than 50%. Though according to the pilot studies 40-60% of participants continued to save regularly after the scheme ended.

glider3560

afwone wrote: »

Those who benefit from the ISAs are the more comfortably off

Not really. Anyone can open an ISA with £1 and continue to contribute to it throughout the year - you don't have to be well off to have an ISA.

john_s_2

opinions4u wrote: »

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.

Not quite. People on means-tested benefits are eligible to apply for Social Fund Budgeting Loans, to help pay for large items as and when necessary (eg cookers, washing machines, etc).

Although interest free, the repayments come out of future benefit. When I used to work for the DSS the repayments were 15% of your benefit (to put it simply).

My motto - and I'm sure the motto of most of us on the savings board - is that if you can afford to repay a loan after the event, you could have afforded to save up for it beforehand.

I'm not saying people on means-tested benefits can or should able to afford to save 15% of their benefits, but when they amounts are set by the Government a certain amount is clearly intended for more than just day-to-day expenses.