Prime minister David Cameron has announced details of a new government scheme designed to encourage low-level earners around the UK to save more money on a monthly basis.
The Help to Save initiative will make available bonuses worth up to £1,200 over the course of four years to anyone who is on a low income but manages to save up to £50 per month.
People who claim working tax credits or universal credits are the intended beneficiaries of the scheme, which will see the government contribute up to £25 per month to the savings accounts of low earners nationwide.
The scheme is being framed as a response to the fact that many millions of adults around the UK currently have less than £500 set aside as savings.
“I’ve made it the mission of this government to transform life chances across the country,” Mr Cameron said in an announcement about the Help to Savescheme.
“That means giving hard-working people the extra support they need to fulfil their potential.
“And that’s what these new measures will achieve – helping someone start a savings fund to get them through difficult times, giving people on low incomes a pay rise and making sure teenagers have the experience and networks to succeed.”
In light of planned cuts to public spending set to be announced this week, the plan to incentivise saving among low-income Brits have been dismissed by the Labour Party as being “like stealing someone’s car and offering them a lift to the bus stop”.
“These [public spending] cuts will mean families are going to struggle to have enough money to make it to the end of the week, let alone save for the future,” said Labour’s shadow work and pensions secretary Owen Smith.
Roughly 3.5 million people around the country who claim either universal credit or tax credits will potentially be eligible to use the government’s Help to Save scheme.
If the scope of the scheme is maximised then an individual could save £3,600 over the course of four years, with £1,200 of that money being contributed by the government.
If you live in Scotland and you’re struggling to retain control of your personal finances then Scotland Debt Solutions could help. Call us directly to arrange a free consultation.
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