Sainsbury's Bank recently commented that if the Government wanted to close the savings gap in the UK, they needed to guarantee the money people invested. According to the Association Of British Insurers, there is currently a £27bn gap between what people are saving and what they should be saving. However, after recent calculations following a survey, Sainsbury's Bank feel the gap is nearer £31bn and rising.
The survey was conducted with over 2,000 adults and showed that instead of saving the necessary 15% of earnings, the average person saved less than 4.7%. To get people to save more towards their own future and not rely on the State, the Government is looking to introduce a number of straight forward investment and saving options. However, after assessing the proposals, many of the products are the same as those out there already available.
A spokesperson for Sainsbury's Bank said: "A factor in building consumer confidence would be offering a guarantee that part of your investment will be safeguared against a fall in value".
Our View
In our opinion the State system in the UK will never encourage people to save unless they are rewarded for doing so. At the moment, you are penalised for having savings as the majority of benefits worth having are based on your income and how much you have in savings. Whilst there are people that need permanent State assistance, they should not receive it at the expense of people who have tried to save for their future.
We believe that the State system needs to be overhauled if anyone is to ever have confidence and start saving for themselves.
Learn more about savings or find out about the right type of savings plan for you in the Savings Adviser.com.
Would you like a free fact sheet on children's savings? Visit the registered users area free download page.