Step Change for compulsary savings

Joe_Bloggs

The excellent StepChange advice charity are advocating a compulsory savings initiative,
http://www.stepchange.org/Mediacentre/Pressreleases/Autoenrolmentsavingscrisis.aspx

J_B.

Perhaps the coffers of the unsaved should get a quantitative easing bonus.

agrinnall

How bizarre. StepChange may well be excellent, but some of their people clearly have too much time on their hands.

jimjames

Unfortunately there is only so much you can do - probably better to educate people rather than make it compulsory. However some people decide to pay out for a new car (for example) rather than build up savings and then come unstuck so not sure how they can be helped unless there is some form of compulsion.

Problem is even if compulsory once the savings are there, who decides what is appropriate to use them for?

Edit - Having read the link I have absolutely no idea what this means "A significant proportion of households (between 8% and 13%) engage with behaviour that does not prioritise long term financial advantage."

Spend all their money down the pub? Would have been more useful to explain what this behaviour is.

Joe_Bloggs

jimjames edited :-

Edit - Having read the link I have absolutely no idea what this means "A significant proportion of households (between 8% and 13%) engage with behaviour that does not prioritise long term financial advantage."

There is a link on the linked page to a 51 page discussion paper.
Employer matched saving incentives are suggested. Bounded rationality is considered worthy of blame for non savers.

Existing high interest debts are an excuse for avoiding long term precautionary low interest saving. This suggests the chicken and egg scenario of not having to borrow money if you had savings in the first place.

J_B.