Darling set to introduce scheme to help savers

18 Oct 07
Chancellor Alistair Darling has taken a tentative step towards a national savings scheme, in which savings made by low earners would be matched with state payments.

19 October 2007

Chancellor Alistair Darling has taken a tentative step towards a national savings scheme, in which savings made by low earners would be matched with state payments.

Last week's Comprehensive Spending Review stated that the chancellor plans to announce the scheme, branded the Savings Gateway, in next year's Budget. The move also follows fears over the security of savers' cash in the wake of the run on the Northern Rock bank.

The Savings Gateway has already been piloted successfully in some low-income areas. The government matched every pound saved by some families with a contribution. More than 22,000 participants took part in the pilots and more than £15m was saved.

The rate paid by the government varied in each pilot and officials are now working out how much the Treasury could afford to pay out.

Graeme Cooke, the Institute for Public Policy Research's welfare researcher, told Public Finance: 'The Savings Gateway has the potential to help more lower-earning families. It is welcoming that the Treasury is… seeking to improve the financial position of such people.'

PFoct2007

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