The purpose of the Bill is to:
Provide a financial incentive to save among some of the poorest in society.
The main elements of the Bill are:
• establishing a national Saving Gateway scheme, as announced in Budget 2008, and giving HM Revenue and Customs the necessary powers to administer it, including to approve providers of the scheme and provide for penalties in cases of fraud and non-compliance;
• permitting financial institutions to offer and operate Saving Gateway accounts and setting out the duties of those that choose to do so;
• defining who will be eligible to open Saving Gateway accounts, and enabling the Government to make a contribution to savers at account maturity, for every pound saved in the scheme
The main benefits of the Bill are:
• offering a national cash saving scheme for working age people on lower incomes, providing a financial incentive to save through a government contribution of 50p for each pound saved;
• the scheme will be open to individuals in receipt of qualifying benefits and tax credits;
• the scheme will open in 2010, with the first Government contributions paid out to savers from 2012;
• in pilots carried out between 2002 and 2007, over 22,000 people took part, achieving over £15 million in savings;
• the scheme aims to kick-start a saving habit among working age people on lower incomes, enabling them to plan for the future and cope with financial pressure, and to promote financial inclusion by encouraging people to engage with financial institutions such as banks, building societies and credit unions.
