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Government slammed as savings levels plunge

Opposition parties have blamed the Government for a fall in savings to their lowest level in more than a decade.

Despite the Government priding itself on getting more people to save, figures from the Office of National Statistics underline Conservative and Liberal Democrat insistence that savings and private pension contributions have fallen dramatically.

The statistics reveal the savings ratio has fallen to 3 per cent, its lowest level since 1988. This contrasts markedly with 1996 when it was 9.5 per cent.

Since then, it has plunged dramatically to 5.8 per cent in 1998 and 5.1 per cent in 1999. The ratio is determined by comparing people&#39s gross earnings with overall spending.

The LibDems say the Government cannot create savings vehicles and expect people to jump on board. They believe there is a need for compulsion to force people to save.

LibDem DSS spokesman Steve Webb says Government initiatives such as stakeholder encourage few people to save.

“The reasons people are not saving is not due to a lack of a suitable vehicle. The Government thinks it can just create a vehicle and people will automatically save,” he says.

The Conservatives say they would cut red tape and taxes to motivate people to save for their future.

Shadow chief secretary to the Treasury Oliver Letwin says: “They may have created more savings vehicles but it is clear they have not managed to persuade people to save more.”

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