Government policy initiatives will have a limited impact on encouraging people to save, an academic has said.
Professor Sharon Collard, the professor of personal finance capability at the True Potential Centre for the Public Understanding of Finance at the Open University Business School, said community initiatives could have more impact.
Speaking at a Westminster Business Forum conference in London today (26 April) she said: “The short term policy environment chops and changes quite a lot.
“What we need is something that transcends that to keep people’s motivation. It is about initiatives that are community-based or are in schools.
“We need initiatives that are beyond politics and policy in order to keep savings in people’s minds.”
Prof Collard pointed out that more than nine million UK households - making up more than 30 per cent of the total - have no savings at all.
This proportion has increased since 2007 to 2008, she said.
In recent years the government has introduced several products under the Isa banner to encourage saving.
These include the Help to Buy Isa, the Innovative Finance Isa and the Lifetime Isa.
Prof Collard admitted these products may have their flaws, such as helping those who already have money to save, but said they should be welcomed.
She said: “For all these concerns these products signal that saving is important.
“But government policy is not going to motivate people to save - it is about winning people’s hearts and minds.
“We need to show people they can afford to save and show them it doesn’t affect their standard of living.”
