Calls for action to rebuild Britain’s savings culture

The Association of Independent Financial Advisers (AIFA), working with AEGON UK, the leading life assurance and pensions company, urge the new Government to take steps to rebuild Britain's savings culture.

In a joint White Paper discussion document published today, entitled ‘Saving Britain', the organisations outline eight practical measures the new Government could implement quickly, using current technology, infrastructure and legislation, to build a new UK savings culture.

With 13 million people in the UK saving inadequately or not saving at all, and the UK having the second lowest saving rate of all OECD countries, the White Paper argues that building a savings culture is now urgent. Saving can bring financial independence and peace of mind to individuals and families, free up scarce resources for the Exchequer and bring benefits to the economy in terms of more capital for investment. An economy that saves more is better balanced and more resilient in the face of future economic shocks.

To create a new savings culture, AEGON and AIFA have presented eight measures that the Government could take now, including:

Making saving easy by introducing the facility for people to ask for "Save back' instead of ‘cash back' - using existing infrastructure to allow people to save at almost any time and at any location.

Build the foundation of a savings culture among school children through introducing school savings clubs and more demanding financial education targets.

Create savings networks within the workplace or other groups such as extended family, friends or those with a common savings goal to reinforce positive attitudes to saving and provide ‘weight watchers-style' peer support and pressure to save.

Reform regulation to boost the availability of professional and impartial financial advice and information.

The White Paper argues many of these proposals can be implemented quickly and will begin to lay the foundations for a sustainable savings culture and calls on the new Government to take decisive action now.

Chris Cummings, director general, AIFA says: "Given the current economic challenges, we believe it is vital the new Government acts decisively to restore a savings culture in the UK. Individually, and as a nation, we need to rediscover thrift and true prudence.  While politicians of all parties agree that saving is a good thing, no one has set out exactly how they would encourage it.

"This White Paper therefore brings fresh thinking to the debate and sets out a policy approach based on how real people think and behave. We must ensure that people have the knowledge and confidence to save for their financial future. Otherwise, as a society, we will all pay a heavy price."

Francis McGee, head of corporate affairs, AEGON UK adds: "Previous attempts to boost saving in Britain have focused on very conventional approaches like tax breaks and product regulation.  I don't think these can work on their own.  A savings culture is built on attitudes and behaviour.  Understanding how people naturally think and interact with one another is the key to a new, inclusive, savings society.

"Simple measures such as developing ‘save back' facilities alongside existing ‘cash back', and encouraging savings networks in the work place could create the right environment for people to take some initial steps. Our report outlines some practical proposals the Government can adopt, based on technology that's already available, and on how people think and behave in today's world."