Increasing savings amongst low-income groups
The Foundation shares the view of many commentators that building some savings can be a way of helping combat poverty and is key to developing future personal autonomy.
UK society as a whole has moved away from savings as a source of wealth. The statistics suggest that building savings is even harder for low-income households; studies show that over 40% of households with low incomes have no savings at all, with a further 15% having savings of less than half one month’s income.
To address the issue of savings for low-income groups, the Foundation recognises that society as a whole must start moving in a new direction, supported by public policy and commercial practice.
Trustees wish to support work to explore a range of issues relating to savings. These might include:
- Is the distribution of savings assets a social justice issue ?
- Structural issues that militate against savings such as poverty, benefits eligibility or institutional behaviours
- The architecture of choice (or 'behavioural economics'); see article by the New Economics Foundation on this topic, for example
- Developing a savings habit: developing models of change; adopting a public health approach
- Designing savings products for low-income groups, based on their preferences and money management requirements.
This is not an exhaustive list of the issues, however, and Trustees might also be interested in seeing proposals that address other areas under this outcome.
Examples of what the Foundation might fund in pursuit of this outcome include:- research on savings; exploratory reviews of different models; think pieces; pilot approaches. We will also actively engage with other agencies working on this issue including UK Government and the devolved administrations in Wales, Scotland and Northern Ireland.
