New Help to Save scheme offers free Government money to unlikely savers
We’re in a savings crisis. We told you so last week. Now, in an effort to divert the impending doom, the government has announced a new savings scheme which will bung up to 3.5 million people some free cash if they manage to save their pennies.
Described as “part of a drive to improve the life chances of the disadvantaged” and a crucial part of his “all-out assault on poverty”, the Prime Minister set out details of the Help to Save scheme, as part of government’s ‘#lifechances’ plan. Research showed that almost half of UK adults have less than £500 set aside for emergencies, so the government has come up with a new wheeze- to offer Government funded bonuses for those on low incomes who can save some actual cash.
The details of the scheme are that those eligible- which is classed as anyone in work and in receipt of Universal Credit or Working Tax Credits- who can save up to £50 a month will receive a 50% bonus after two years, worth up to £600. And if it's all going swimmingly, account holders can then choose to continue saving under the scheme for a further two years and receive another £600 bonus.
After four years, therefore, the poor could end up with £3,600 in a bank account, with £1,200 of that coming from government coffers.
Speaking ahead of the Budget on Wednesday, Prime Minister David Cameron said: “I’ve made it the mission of this government to transform life chances across the country.” Although some might argue that so far the transformation has not necessarily been a positive one.
Chancellor George Osborne said:
“This government is determined to improve the life chances of the poorest in our society and our new Help to Save scheme will mean millions of low income savers across the country could now receive a government bonus of up to £1,200 to help them build up their savings.”
Critics of the scheme point out that, for those on low incomes, the idea of having a spare £50 each month is something of a pipedream, with the notion that they wouldn’t have to call on any savings over two or four years even less likely. Still, it’s a nice idea- isn’t it?