A consultation response to HM Treasury’s proposals for a new programme to subsidise savings for those on low income.
Help to Save adds a 50% bonus to money placed in a savings account, in which up to £50 per month can be saved. The bonus is paid at the end of two years with a maximum available bonus of £600, and a saver can then repeat the programme for one other period of two years. Any adult working and also receiving Universal Credit will be able to take part if their household income is above the equivalent of 16 hours a week at the National Living Wage.
Our response to the proposals focuses on these key points:
- We support the government’s initiative to encourage people on low incomes to build savings, which are key role in the financial health of households
- There are substantial barriers to accessing financial services for lower income consumers, so the Treasury should work with the FCA to ensure such barriers affect the take of Help to Save as well
- Low income targets of this scheme would benefit from an auto-enrollment option (subject to consultation over proposed method) and additional features that allow users to assign their own savings goals and targets
- HM Treasury the HTS account providers should consider how they can deliver more effective communication for targetted consumers to aid savings decisions and taking control of their finances.