Saving is difficult. It goes against the immediacy of our impulses and the messages of our culture. But what is difficult for us as individuals is a problem for us all as a society.
The financial crisis showed how vulnerable we are, both as individuals and as a society, to shocks. Too few of us are saving at all. More than one fifth of households have more debts than savings. Even fewer of us are saving enough for our longer-term needs. Traditional approaches to savings policy try to make us into a nation of habitual savers. But changing our behaviour is difficult. Based on new empirical analysis of the Wealth and Assets Survey 2006/08 and data from the Child Trust Fund, this paper argues for a whole new approach to savings policy. Many people would save if it was easier to do. With ideas from a No Lose Lottery to a Savings Smartcard, this report calls for creativity from policy makers, banks and businesses, to develop savings policy for people who don’t much like to save. Given the scale of the challenge, a radical rethink of savings policy is needed. This report is the beginning of that task.