Warm welcome for saving gateway

28.06.2005 Halifax, the UK's largest savings and social banking provider, today announces that the second pilot phase of the Government's Saving Gateway initiative has made a successful start, with an average of 100 accounts opened each day since its launch in March.

Halifax remains the sole provider for the second pilot, which will run until December 2006, with the number of accounts that can be opened during this period increased to 20,000.  The areas involved in the current phase are Manchester, Cambridgeshire, East Yorkshire, South Yorkshire, London, Cumbria and North Lancashire.
During the original pilot, which ran from March 2002 to November 2004, around 1,500 accounts were opened.  The second pilot represents a major expansion in terms of account numbers and geographic coverage.
Participants can make monthly contributions into the Saving Gateway account up to a pre-determined limit, which varies by geographical location and ranges from £400 to £2000.  After 18 months the Government will make a matching contribution based on the amount of money saved (see Editors' Notes for details).
The aim of the pilot is to test alternative match rates, different monthly contribution limits, the effect of an initial endowment and the support of a wider range of community financial education bodies.
The Saving Gateway was first launched in 2002, with Halifax being selected as the sole provider for the scheme in five locations Gorton (South East Manchester), Tower Hamlets (East London), Hull and parts of Cumbria and Cambridgeshire.
Cheryl Millington, head of savings at Halifax, said:
"The Saving Gateway gives individuals on low incomes a real incentive to start saving, and I am delighted with the positive response it has already received."

Maximum contributions for Saving Gateway

Area	Match Rate	Monthly Limit	Maximum participant savings	Max. Government contribution**
Cambridge	£1 for £5	£125	£2000	£400
Cumbria	£1 for £2	£50	£800	£400
East London	£1 for £5	£50	£800	£160
Manchester	£1 for £1	£25	£400	£400
East Yorks	£1 for £2*	£25	£400	£250*
South Yorks	£1 for £2	£25	£400	£200

* Includes initial £50 endowment to kick start saving
** Total Government match is calculated as 16 out of 18 months
Evaluation of the original Saving Gateway pilot, commissioned by the Treasury and carried out by the Personal Finance Research Centre at Bristol University, found 1,478 accounts were opened between August 2002 and the end of May 2003.  Very few of these customers had been saving regularly before the Saving Gateway was introduced and two thirds said they intended to continue saving afterwards.
By the end of the pilot these 1,478 participants had saved a total of approximately £475,000, with over half achieving the maximum amount of £375, and 70% saving over £300.  The final evaluation confirms matching can double saving among low-income groups (average individual net savings increased from £150 to £300 over 18 months) and encourage genuinely new savers and new saving.
As with the first pilot, participants in the second Saving Gateway will have access to their own savings at any time, but not to the Government match.  Any savings withdrawn will not be eligible for matching unless they are paid in again during the lifetime of the account.
Participants will only have access to the Government match once the pilot account matures after 18 months
[08-06-05]