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StepChange calls for savings incentives


StepChange, a leading UK debt charity, has called for banks to add incentives to save, so that more families will have a financial “buffer” if something goes wrong.

The debt charity has discovered that an estimated seven million homes in the UK do not have emergency savings adding up to at least £1,000. They believe that with savings of £1,000, approximately half a million UK households would be prevented from falling into debt.

StepChange have now suggested a system that diverts workers wages into savings to help encourage more people to save. This would work similar to pension savings, and the money would go towards a pot that could be used in emergencies. Other incentives suggested included savings accounts which give savers the chance to win cash prizes, and the idea of renewing matched savings- a scheme were the government would top up any money put into specific savings accounts.

Mike O'Connor, chief executive of StepChange, said: "Our research highlights a national savings crisis with far too many families living without a financial safety net and at real risk of problem debt.

"Adapting the existing approach to pension saving would ensure each adult is better able to cope with an unexpected bill and a loss of income without sinking into debt."

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