The Government are being urged to help the less well-off by matching any savings they make. One idea is for the Government to introduce a means-tested arrangement whereby savings would be matched £1 for £1 upto a limit of say £500.
There has already been a pilot of this system run by Halifax but we believe that the take-up had been poor. This was possibly due to the lack of promotion.
Our View
Anything that is money for nothing can't be bad. However, in the past people with savings have been penalised when it came to means-testing for State benefit entitlements. This issue has now started to be addressed by the Government, with the introduction of the Pensions Credit. But, they could be doing a lot more and a scheme with matched payments would definitely be worthwhile.
The Government will have to weigh up whether matching payments would be more expensive than paying out benefits to the lower paid. We believe that people should only save what they can realistically afford on a regular basis. There are so many types of savings available that people become confused and then tend to do nothing.
Having bank and building society accounts is a good start but make sure the interest you receive is not taxed if you don't pay tax.
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