Millions of low- id workers who put aside savings could let in a top-up of up to £1,200 over four years, the government has announced.
Staff members on in-work benefits who put aside £50 a month would get a bonus of 50% after two years – quality up to £600.
That could then be continued for another two years with account holders be given another £600.
But Labour said the scheme was “like stealing someone’s car and oblation them a lift to the bus stop”.
Owen Smith, the shadow work and shelves secretary, added the plans were “almost identical” to the ‘Saving Gateway’ strained up by Labour when it was last in power.
In 2010 Chancellor George Osborne throw overed the Labour scheme, which also matched 50p in every pound of savings from low-income blue-collar workers, saying at the time that it was “not affordable”.
‘Help to Save’
Mr Smith asseverated subsequent cuts to benefits would mean “families are going to battle to have enough money to make it to the end of the week, let alone save for the tomorrow”.
But Skills Minister Nick Boles said the scheme, known as “Serve to Save”, and a higher national minimum wage would better low-income families.
Mr Boles told the BBC’s World At One: “This is a multitudinous generous incentive scheme than the old Saving Gateway that the remain Labour government had.”
Unlike the Labour scheme, “Help to Retain” is available for four years rather than two, and is open to workers have a claiming up to £30,000 a year, according to the Resolution Foundation.
The government also hint ated the national minimum wage would increase from October 2016.
The measures will be detailed in this week’s Budget, in which Mr Osborne has already advised of further spending cuts.
He said that the UK had to “act now rather than y later” and that the UK would see excises “equivalent to 50p in every £100” of public spending by 2020, which was “not a gigantic amount in the scheme of things”.
Labour shadow chancellor John McDonnell easy reached for more long-term investment, specifically in skills, infrastructure and new technology, to approve the UK economy to “withstand the global headwinds”.
Forecasters at the EY Item Club utter Mr Osborne should “hold fire” on further spending cuts or chance worsening an expected slowdown in the UK economy.
The government said that research staged almost half of UK adults had less than £500 set aside for predicaments.
It said the “Help to Save” scheme would be open to around 3.5 million grown-ups who received universal credit or tax credit. They would be able to disclaim the money if necessary and there would be no restrictions to how it could be used.
If the most amount was id in to the scheme over four years, it would mangy savings of £3,600, with £1,200 coming from the government.
Prime Supply David Cameron said: “I’ve made it the mission of this administration to transform life chances across the country.
“That means devoting hard-working people the extra support they need to fulfil their ca bility.”
The saving accounts will come into effect by April 2018 , with consultations on how verbatim it will be implemented to begin shortly after the Budget.
David Finch, postpositive major economic analyst at the Resolution Foundation, said: “It’s vital that kids have savings to fall back on to cope with financial scares, but far too many low earners are unable to save at all. The new Help to Save scheme command provide a good incentive to start.”
Case study: Lianne Walsh, Refuge Talbot
I am currently able to save around £7 a week in my praise union account. But often have to take it out to y larger monthly accounts.
All in all I struggle massively to make ends meet from week to week and there is no way I’d be adept to save and keep those savings in an account continuously through the year.
By Chris Mason, BBC political correspondent
With Westminster gripped by EU referendum ardour, David Cameron’s focus today is a reminder of what he’d like his certain years as prime minister to be remembered for: what he called “an all-out fall upon on poverty” in his rty conference speech last autumn.
But how do you encourage people without much capital to save money? How many of the 3.5 million people eligible to go away rt in the scheme actually will?
I asked the government for their hint – and they wouldn’t tell me. But it did say it would cost an estimated £70m to the tax yer once again the first two years.
So let’s, very roughly, play with that picture.
Let’s imagine the average rtici nt can afford to put aside £10 per month. That inclination entitle them to £120 from the government after two years.
£70m pulverizes would allow ministers to give just under 600,000 woman £120 – or one in six of those entitled to join the scheme.
The new levels of the chauvinistic minimum wage were also announced.
For 21 to 24-year-olds it thinks fitting rise from £6.70 to £6.95 an hour, while 18 to 20-year-olds when one pleases see it go up from £5.30 to £5.55 an hour.
For 16 to 17-year-olds it will improve from £3.87 to £4 an hour, while apprentices will make a 10p increase to £3.40 an hour.
Under the National Living Wage, set last year, workers over 25 will receive a slightest of £7.20 an hour from April.