Within today’s Pre-budget Report (PBR) alongside the headline reduction in VAT is the expansion of the Savings Gateway Scheme (SGS). This scheme has been trialed in various, mostly deprived, areas and was judged a great success. Essentially the scheme encourages those on low incomes to save by topping up every £1 saved with an additional 50p. The details of the scheme are yet to be announced, but if it is organised like previous trials there will be some rules surrounding the additional payments.
The SGS offers a real opportunity for the credit union movement in the UK. I was involved in a CU which became part of one of the SGS trials. It was a great recruitment tool for the CU and also ends up encouraging thrift and co-operative values like self help.
No doubt the institutions that offer the gateway will have to apply in a competative tendering process, and with banks fighting for deposits in the wake of the credit crunch, they too will be keen for a slice of this government money. Hopefully there will be preference given for locally owned co-operative institutions like credit unions as this would tackle financial exclusion through expansion of their existing good work in that area.
This could be a massive opportunity for the credit union movement to go mainstream. I hope every eligible CU becomes part of the SGS and work with government for the mutual benefit of the areas they serve. With enough promotion and excitement SGS could be a massive boost for CUs and consequently disastrous for the predatory doorstep lenders.
Filed under: General | Tagged: credit crunch, credit unions, Doorstep lenders, Financial Exlusion, Financial Inclusion, Pre-budget Report, Savings Gateway, VAT
