Government to Give £1,200 Savings to Low Paid Workers

The Government has unveiled plans to gift lower income workers £1,200 if they save £2,400 themselves in a bid to encourage savings culture

Emma Wall 14 March, 2016 | 2:54PM
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How much have you got set aside for a rainy day? According to Government research the almost half of UK adults have less than £500 in savings – hardly sufficient to cover one month’s rent in huge swathes of the country. In a bid to kick-start the seemingly lost savings culture the Government has announced plans for a ‘Help to Save’ scheme which will boost the savings of lower-income workers by 50%.

Only those in receipt of in-work benefits will be eligible for the scheme, which is worth up to £1,200 in free cash over two years. Workers must put aside £50 a month for four years to claim the maximum bonus, receiving £600 after the first two year period and a further £600 in another two years. Further details will be revealed in Wednesday’s Budget Report.

Andy Cumming, head of Advice at Close Brothers Asset Management warned that the scheme would not be enough to boost the troubling savings ratio in the UK, but it might encourage some.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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