Low paid workers to get up to £1,200
bonus with new Help to Save scheme
George Osborne confirmed, the previously announced Help to Save scheme would be available to low income savers within two years.
Mr Osborne said the government were committed to helping the poorest in our society benefit from saving, he said that the governments new scheme will mean millions of low paid savers across the country could receive a government bonus of up to £1,200 which would help them to build their savings.
It is calculated that around 3.5 million low paid workers on universal or working tax credits will be able to set up a monthly saving plan of up to £50 which would attract a bonus equivalent to 50% of what you have saved- a maximum of £600 after two years. Savers can continue to use the scheme for another two years and benefit from another bonus of up to £600.
When you are on a low income saving is often the last thing on your mind, this was confirmed In a recent study where it was found that almost 50% of adults in the Uk had less than £500 in savings set aside for a rainy day.
The new scheme has been widely welcomed by debt charities and financial planners, although some have voiced reservations.
Mike O’Connor, chief executive of debt charity StepChange, welcomed the move, he said: “Our research shows that if every household in the UK had £1,000 in rainy day savings, 500,000 would be protected from falling into problem debt.”
However, Mr O’Connor added that they are concerned two years is too long to wait for a bonus, as “such a wait may see families overtaken by events”.
Mr O’Connor also said, that to build financial resilience, any savings scheme needs to form part of a “responsive safety net”, including more affordable credit and better protections for those in financial difficulty.
David Cameron also announced his government are increasing the national minimum wage for young workers. These changes will take effect in October and will see the rate increase by 25p per hour for 21-24 year olds, which means they will be earning £6.95 per hour. Anyone in the 18-20 year old group will see their hourly rate increase to £5.55 per hour.
The rate will also increase by 13p to £4.00 an hour for the under-18s and apprentices will be given an extra 10p an hour taking them to £3.40.
The government previously announced that April will see the over 25s being paid a national living wage of £7.20 per hour.
Speaking about the above announcements, David Cameron said “I’ve made it the mission of this government to transform life chances across the country.
“That means giving hard working people the extra support they need to fulfil their potential.
If you are looking to set up a new savings plan or would like help in getting the most out of your existing savings, contact Hoskin Financial planning for a Free consultation on 01621 876030 or leave us your details here
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