Money News
The Chancellor announced details of the new Savings Gateway scheme - the plan set to be aimed at poorer individuals on child tax credits, income support and so on.
Under the deal the plans, promoted by banks and building societies, are due to run for two years. At the end of the two years the Government pledges to match each pound saved into the account. Participants can save a maximum of £25 a month up to an overall account limit of £375, providing a total of up to £750 with matching funds.
Darling also confirmed the new allowances for ISAs. These are set to rise to £7,200 for a stocks and shares ISA, £3,600 for cash ISAs, from April 6th.
Malcolm Cuthbert, Managing Director of Financial Planning at Killik & Co, described the launch of the Savings Gateway as an excellent way to help encourage those on low incomes.
"But Darling's boast of 'providing better incentives for saving' doesn't ring true for the average working family. It is almost 10 years since Gordon Brown introduced ISAs with an annual allowance of £7,000 and there is to be a minimal increase in April taking the limit to £7,200 - this has not kept pace with inflation.
"If the Government is serious about encouraging people to save they should push up this limit to £10,000 a year per individual," he added.
Meanwhile, TISA - the trade association for the retail financial services sector - was equally positive regarding the Savings Gateway - TISA Director-General, Tony Vine-Lott saying it has a very important role to play in building a fairer society and improving financial engagement.
12 March 2008 © Moneyextra.com
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