Savings Policy in the United Kingdom

We have just released a paper by Michael Johnson, recently of the UK think tank Institute for Public Policy Research, which analyzing the state of play for savings policy in the United Kingdom. There are many interesting initiatives going on over there which the paper describes, including giving every newborn a savings account. We have been tracking this Child Trust Fund effort for a number of years and have used its insights to inform the development of the ASPIRE Act.

However, the interest which has built up around asset-based welfare over there has also produced several other groundbreaking efforts, such as Savings Gateway which is a national policy to match the savings of targeted households and a major effort to reform the provision of pensions so almost everyone has access to this savings opportunity through their employers. Michael does a great job of describing these policies individually and summarizing the state of knowledge for each one. But what is particularly noteworthy is how these efforts collectively form a policy continuum which spans the life course.

He writes:

Over the last 25 years, we witnessed a profound change in the way that consumerism in the UK was funded. Increased levels of personal debt and diminished levels of personal savings that became the norm during sixty quarters of unbroken economic growth have proved to be unsustainable. A more austere approach to personal financial management is already being advocated and the future may hold a comprehensive policy framework that encourages people in the UK to make building assets a lifelong endeavor.

The paper is a recommended read for anglophiles and savings-philes alike.