Help to Save scheme welcome, but devil in the detail
March 14, 2016
In response to David Cameron’s announcement of the Help to Save scheme, Mike O’Connor, Chief Executive of StepChange Debt Charity, said:
“We welcome Government recognition of the need for a savings scheme aimed at those on low incomes. Our research shows that if every household in the UK had £1,000 in rainy day savings, 500,000 would be protected from falling into problem debt[1] .
“With any such scheme, the devil will always be in the detail and there are a number of design features to be worked out. Matching contributions which have been shown to encourage savings and the flexibility provided to savers on accessing the funds are positive. We are concerned that having to wait two years before getting any bonus is too long. Such a wait may see families overtaken by events as they access the funds for emergencies, therefore concern at losing the bonus could simply act as a disincentive to save in the first place.
“In order to build financial resilience and to protect people on low-incomes from the risk of falling into debt, any savings scheme needs to work alongside other elements of a responsive safety net, including access to more sustainable and affordable credit and better protections for those in financial difficulty”.
Notes to Editors
- Becoming a Nation of Savers, a report by StepChange Debt Charity (August 2015)