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Treasury Select Committee urges launch of national savings gateway

A Treasury Select Committee Report has urged the Government to launch a national saving gateway to encourage low-income individuals to save by matching their contributions.

The Committee says such a scheme would be the single most important step towards increasing the level of saving among low-income individuals and households.

Committee chairman John McFall MP says the pilot projects have shown the capacity of Government matching to make a real difference to savings habits among some of the poorest sections of the community.

He says: “Most current incentives to promote saving are targeted towards the better off. It is time to redress the balance. The costs of a national saving gateway is likely to be little more than one tenth of the annual subsidy for ISAs and PEPs and little more than one twentieth of the annual subsidy for employee pension savings.”

The Committee also argues that the Government should commit itself to achieving a change in the coverage of third sector saving institutions, and recommends early legislative action to remove barriers to the development of credit unions.

McFall says: “Credit unions have vast potential to promote saving, and often have a strong base in communities where a small increase in saving can really make a difference to individuals’ lives. This potential needs to be unlocked. They should be able to attract a broader range of members, and pay interest on savings, and the Government should carry through on its consultation with early legislation to replace the outdated legal framework in which credit unions operate.”

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