Help to Save Scheme

Lord Young of Cookham Excerpts

Thursday 17th March 2016 Lords Chamber

Asked by

[Lord Young of Cookham]

To ask Her Majesty’s Government, following their announcement concerning the Help to Save scheme, how many people in work and receiving either Working Tax Credit or Universal Credit are expected to benefit from that scheme.

[Lord Ashton of Hyde (Con)]

My Lords, 3.5 million people on the lowest incomes will be eligible to open a Help to Save account when the scheme is launched, which will be no later than April 2018.

[Lord Young of Cookham (Con)]

I am grateful to my noble friend for that reply. As nearly half the adult population have savings of less than £500, it is clearly sensible to have a scheme like this to encourage them to put money on one side for a rainy day. As by definition these savers are on low incomes, can my noble friend give an assurance that these accounts will be easy to access and accessible without penalty?

[Lord Ashton of Hyde]

My noble friend is correct. This is designed specifically for those on low incomes. In fact, we think that 95% of the eligible population from households will have total incomes of less than £30,000. The idea is that people will be able to withdraw at any time without penalty to cover urgent costs. The Government will consult shortly on how exactly the bonus should work. We want to avoid disincentivising people from making withdrawals when they need to. The whole point is to get households saving a bit so that they can cope with unexpected shocks.