Promoting saving and asset ownership
The Government seeks to support saving and asset ownership for all, from childhood, through working life and into retirement. The Government recognises the importance of savings in providing people with: independence throughout their lives; security if things go wrong; and comfort in retirement.
Since 1997 the Government's saving strategy has focussed on improving the environment for saving, providing adequate incentives for saving, and empowering individuals with the capability to make the right savings choices.
The key ongoing challenges for savings and pensions are:
- Equipping people with the capability to make saving decisions;
- Promoting access to good savings opportunities; and
- Making incentives to save more effective by overcoming inertia, through making saving opt-out rather than opt-in.
In January 2007 the Government set out its aspirations for increasing consumers' financial capability over the next 10-20 years. These include widening access to generic financial advice, supporting personal finance education in schools and support to help people make financial decisions with confidence. For more information see Financial Capability: the Government´s long term approach , HM Treasury's financial capability web page and the Financial Services Authority's financial capability website (external website).
To ensure that everyone has the opportunity to access appropriate saving products the Government is committed to tackling financial exclusion. In December 2007 the Government published its financial inclusion action plan, which sets out Government's strategy for financial inclusion in 2008-11, including how the £130 million Financial Inclusion Fund will be spent in 2008-11. For more information see Financial inclusion: an action plan for 2008-11 and HM Treasury's financial inclusion web page .
The Government aims to sharpen the incentives to save for key groups, particularly those on lower incomes, These incentives are supplemented by positioning saving as the default option, for example with the auto-enrolment in personal accounts and the Child Trust Fund.
The Government wants more people to be able to enjoy the benefits of saving and since 1997 has put in place a number of reforms to encourage people to do so. The Government has:
- Extended incentives for saving by introducing Individual Savings Accounts (ISAs) , which allow tax-advantaged saving. A package of reforms will come into effect in April 2008 which will make ISAs even more attractive by allowing people to save more, and by being more flexible and simpler to use.
- Introduced the Child Trust Fund (CTF) , which will promote saving and financial education and will ensure that in future all children have a financial asset at age 18, regardless of family background.
- Announced that the Saving Gateway , a cash saving scheme to promote saving and financial inclusion for those on lower incomes, will be introduced nationally, with the first accounts available to savers in 2010.
- Used employee share schemes to both encourage saving and help in its aim to facilitate greater share ownership, so that more people can benefit from the potential for growth that shares offer.
- Implemented White Paper pension reforms to encourage private pension saving and enable individuals to take personal responsibility for their retirement. It has also made state pension reforms to provide a simpler and more generous state pension foundation in future.
- Worked with the Financial Services Authority to raise levels of financial capability through the National Strategy for Financial Capability (external website).
The below documents are available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website . For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page .
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