Savings Gateway scheme offers £375 match funding

by Gill Montia

Story link: Savings Gateway scheme offers £375 match funding

The Chancellor of the Exchequer, Alistair Darling, announced details of the new Savings Gateway scheme in this week’s Budget.

The scheme is aimed at the less well-off, such as those claiming child tax credits and income support.

Banks and building societies will be charged with promoting the scheme, which will run for two years, at which point the Government will match each pound saved.

The account will have a savings limit of £375 and a maximum monthly deposit of £25.

For those taking full advantage of the scheme, it will produce £750 including matched funds.

Mr Darling also confirmed the new allowances for ISAs. From the 6th April they will rise to £7,200 for a stocks and shares ISA and £3,600 for a cash ISAs.

The introduction of the Savings Gateway scheme has met with approval from most quarters but with regard to the ISA allowance, Malcolm Cuthbert, managing director of financial planning at Killik & Co, points out that it is almost 10 years since ISAs were first introduced, with an annual allowance of £7,000.

MrCuthbert suggests: “If the Government is serious about encouraging people to save they should push up this limit to £10,000 a year per individual.”