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Saving Gateway

Saving Gateway

HM TREASURY News Release (59/07) issued by The Government News Network on 25 May 2007

Ed Balls, Economic Secretary to the Treasury, speaking today at the opening of the new Bristol Institute of Public Affairs, launched the evaluation report of the second Saving Gateway pilot and outlined the Government's next steps on this key initiative.

The results of the second Saving Gateway pilot build on the positive results of the first pilot, and show overwhelmingly that the principle of matching savers' contributions helps those on lower incomes to save, to learn the savings habit, and use mainstream financial institutions.

Ed Balls said:

"Saving Gateway is a simple and straight forward way to help people to save. The pilots have been overwhelmingly positive about the effect of matching as a targeted incentive to help people on lower incomes to save and teach them the habit and benefit of saving."

"I want to discuss with stakeholders and the financial services industry how we can build on the success of these two pilots and we plan to make further announcements on the next steps for the roll out of the Saving Gateway in the Pre-Budget Report."

Saving Gateway is a savings account designed for lower income groups to encourage them to save and engage with mainstream financial services.

Key findings of the report are:

* participants are overwhelmingly positive about the effect of matching, and find it a simple and easily understandable incentive to save;

* there is no need to offer match rates as high as pound-for-pound in order to incentivise people to save;

* the account provides a structure for regular savings - monthly limits of £25 were affordable for those on lower incomes;

* a time-limited account (18 months in the pilots) kick-started a saving habit among those new to saving, and most participants believed that they would continue to save after the Saving Gateway ended; and

* there are financial inclusion benefits from the scheme, participants became more familiar with financial products and information, some also came into contact with a bank for the first time in their lives.


1. Saving Gateway is a savings account designed for lower income groups, which aims to promote engagement with mainstream financial services and a saving habit. The first Saving Gateway pilots were announced in Pre Budget Report 2001 and ran from August 2002 to November 2004. The pilots took place in five areas - Cambridge, East London, East Yorkshire, Cumbria and Manchester.

2. The first pilot involved around 1,500 participants, with individuals' accounts open for an 18-month period. Where individuals could save up to a limit of £25 per month for 15 months, enabling them to save a maximum of £375, for which they received a £1 to £1 match.

3. The evaluation of the first pilot was conducted by the University of Bristol, Personal Finance Research Centre and was published in March 2005 - 'Incentives to save: Encouraging saving among low-income households' - and found that:

* The scheme generated both new savers and new saving. For example, among participants, the number of people saving regularly quadrupled and the amount they saved doubled.

* There was evidence that the scheme led to behavioural changes: 41% of participants were still saving three or more months after the pilot finished and 32% of participants said that they were more likely to plan for retirement.

4. A second pilot was announced at the 2004 PBR and started in March 2005 and finished in March 2007. It operated in the same five locations as the first pilot, as well as an additional area in South Yorkshire. Around 22,000 accounts were opened by July 2005.

5. The second pilot tested alternative match rates (£1 Government contribution per every £1, £2 or £5 saved), different monthly contribution limits (£25, £50, £125), the effect of an initial endowment (£50). The second pilot was also tested with a far wider income group: individuals were eligible for the Saving Gateway account if they earned less than £25,000 per annum and had household earnings of less than £50,000, or were out of work and receiving benefits.

6. The evaluation of the second pilot was carried out by Ipsos MORI and the Institute for Fiscal Studies. An interim evaluation was published in July 2006 and the final evaluation has been published today. Both reports are available at the following link:

7. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558, or by e-mail to

8. This press release and other Treasury publications and information are available on the Treasury website at If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website.

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