IPPR demands savings help for low-income familiesThink tank report calls for government action
18 February 2010
Leading think tank, the Institute for Public Policy Research (IPPR), has called on the government to roll out life-long savings accounts and free money guidance aimed at low-income families.
Publishing the final research paper from its consumer spending and debt project, Strength Against Shocks: Low-income families and debt, IPPR called on the government to address income inequality and job insecurity, as well as creating a fairer credit market for consumers and providing greater support for families against loss of income.
Key IPPR consumer debt recommendations
The IPPR report highlights four key areas in which the think tank wants to see action:
- A call for the government to set up a life-long savings account with incentives for low-income households, funded by limiting the tax relief on pension contributions to the basic rate for everyone. Keeping money in the account and saving should be rewarded with ‘bonuses’ in order to help increase low income households’ resilience to financial shocks.
- IPPR argues that all lenders should be required to offer deferred interest payments for up to two years for eligible candidates, while the mortgage-holder’s efforts to find a job are supported through welfare-to-work services. The government Homeowners Mortgage Support initiative should be a permanent and compulsory measure for all lenders.
- An online credit comparison website that provides accessible information on local, affordable credit, building on the popularity of price comparison websites. IPPR suggests this could be developed by local authorities in partnership with bodies such as the Association of British Credit Unions and the Community Development Finance Association.
- IPPR’s research supports the national roll-out of the Government’s Money Guidance Service currently being piloted in the North of England, but calls for it to broaden the range of advice offered. The service should offer impartial mortgage advice and promote awareness of savings and affordable credit initiatives aimed at low-income households.
Which? welcomes consumer debt report
Which? debt expert Martyn Saville commented: 'Which? welcomes the IPPR project looking at how low-income families have coped with the economic downturn. The experiences of callers to the Which? Money Helpline really highlight how great the public need is for impartial and free money guidance.'
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