Background
3.In the 2008 Budget, the Government announced that the Saving Gateway, a cash saving scheme for working age people on lower incomes, would be introduced nationally.
4.The Government consulted formally on the principle of the Saving Gateway in Saving and Assets for All(1), published in April 2001. The Saving Gateway was piloted twice between 2002 and 2007 and evaluations of these pilots(2), as well as further research on participants in the second pilot(3), have been published. The Government also published The Saving Gateway: operating a national scheme(4), in March 2008. This consultation document set out proposals for introducing the Saving Gateway nationally. A summary of responses to this consultation(5), was published in December 2008. All of these documents are available from the Treasury website(6).
5.The policy intention of the Saving Gateway is to:
promote a saving habit among working age people on lower incomes by providing an incentive to save through a government contribution for each pound saved; and
promote financial inclusion by encouraging people to engage with mainstream financial services.
6.Eligibility for Saving Gateway accounts is ‘passported’ from certain ‘qualifying’ benefits and tax credits. Eligible people may open accounts with financial institutions that have been approved to offer Saving Gateway accounts by Her Majesty’s Revenue and Customs (HMRC). Saving Gateway accounts will be of a fixed duration. At the end of the account’s duration the Government will make a contribution for each pound saved.
7.This Act sets out conditions for eligibility for the Saving Gateway. It imposes a duty on HMRC to issue notices to those people who are eligible for the Saving Gateway, and to pay any government contribution (a “maturity payment” or “death payment”) that is due under the scheme. Details of the requirements for providers and of the operation of accounts will be set out in regulations. The Act contains additional provisions covering such matters as tax relief, the use of information, a requirement for review of the effect of the Saving Gateway, penalties, and arrangements for appeals against decisions taken by HMRC.
8.The Act has 33 sections.
The Modernisation of Britain’s Tax and Benefit System, Number 8 (HM Treasury, 2001)
Incentives to save: Encouraging saving among low-income households, Kempson, McKay, Collard (Personal Finance Research Centre, University of Bristol, March 2005); Final Evaluation of the Saving Gateway 2 Pilot, Harvey, Pettigrew, Madden, Emmerson, Tetlow, Wakefield (Ipsos MORI and Institute for Fiscal Studies, May 2007).
Saving Gateway – Following up the second Saving Gateway pilot participants, (Ipsos MORI, Social Research Institute, June 2009)
The Saving Gateway: operating a national scheme (HM Treasury and HM Revenue and Customs, 2008).
The Saving Gateway: operating a national scheme, Summary of Responses (HM Treasury and HM Revenue and Customs, 2008)
