Trial to help workers build £1,000 emergency savings pots - MSE News

PasturesNew

If you have the money - you would be saving it.
Many people without savings don't have enough money coming in.

Quicker/easier to just PAY PEOPLE A BIT MORE....

HornetSaver

Auto-enrollment, in and of itself, is a tacit acknowledgement that most people are apathetic about financial planning, and therefore what's needed is a system where apathy has a default option other than "no saving". I think the same principle should apply to emergency funds.



As for PasturesNew's point though, I think the answer is to divert a portion of a future above inflation minimum wage increase into such a scheme. The problem which is at least a generation old now, is how to increase the living standards of full time low-earning workers, not just the cash on their wage slip, because inflation on the basics such as housing, transport and heating always seems to outstrip rises in earnings.

Alexland

Glen_Clark wrote: »

I guess it depends on the tax treatment - which hasn't been explained.
It seems to be taken from pension contributions (taken from wages before tax). In which case whats to stop people just taking money out for supposed emergencies just to get it tax free.?

You are thinking of a net pay arrangement but Nest use relief at source where they claim back the tax so the employer would make both payments after tax and Nest would only be able to claim back from HMRC the pension proportion.

https://www.nestpensions.org.uk/schemeweb/NestWeb/public/helpcentre/contents/how-should-i-calculate-tax-relief-with-my-earnings-basis.html

Alex

Zero_Sum

So if its part of your pension conts does that mean its tax deductable.
So you get £1 for every 80p you put in?

Alexland

Zero_Sum wrote: »

So if its part of your pension conts does that mean its tax deductable.
So you get £1 for every 80p you put in?

No, read my above explanation - it is not part of your pension but is deducted in the same way but will not benefit from an HMRC uplift.

Alrx

talexuser

Was not the latest statistic that 45% of the population do not have access to liquid savings of £500 for an emergency?

I suppose the idea of this is fine, and it might work for some people who were not brought up to save and can put a little away without impacting their lifestyle too much. But the far larger problem is a low wage/minimum wage/non guaranteed working hours economy at the low end, and this might just be some tinkering at the edges.

It's difficult to see how it can get better if now retail jobs reduce with the growth in online shopping (which anyway does not seem to contribute the same tax to the exchequer).

colsten

talexuser wrote: »

Was not the latest statistic that 45% of the population do not have access to liquid savings of £500 for an emergency?

26 per cent of working-age adults have no rainy-day savings, and only 42 per cent have £500 or more on hand, according to a Money Advice Service survey in 2016. http://www.nestinsight.org.uk/wp-content/uploads/2017/09/Liquidity-and-sidecar-savings.pdf