Plan to help poor families save
New plans to prevent Britain’s poorest families having to resort to loan sharks for money have been announced by David Blunkett.
The work and pensions secretary said he wanted to help those without savings build up a “tiny nest egg” to prevent them having to approach unregulated lenders when they need credit.
It is believed that an estimated three million people in the UK do not have a bank account.
Speaking to ITV1’s Dimbleby programme ahead of his speech to the Labour conference on Monday, Mr Blunkett said his aim was to “get those at the very bottom to save a little so they are not reliant on the sharks and the people who would loan them money which end up with them being in a bigger mess, in greater poverty than when they started”.
He said the government intended to help people to save by doubling the amount of money they could put away without affecting their benefits.
It intends to raise the savings threshold from £3,000 to £6,000.
The work and pensions secretary said an extra £210 million would also be allocated to the Social Fund, which provides loans to those who find it hard to cover important day-to-day costs from their regular income.
Mr Blunkett said those who had paid off a Social Fund loan would be encouraged to continue contributing the same amount in order to build up savings.
He added that a further £36 million would also be allocated to credit unions and other not-for-profit lenders.
“Our task is to get people into a position – even those who have had to take out Social Fund loans – to be able to get an account, to be able to build up a tiny nest egg,” added Mr Blunkett.
“We are not talking about lots of money. We are talking about enough to be able to buy a new cooker or a bed.”
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