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No-lose lottery suggested to get people saving

No-lose lottery suggested to get people saving

Category: Savings

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A report looking into ways of getting the nation saving has suggested introducing a no-lose savings lottery.

The idea has been put forward by the Social Market Foundation which also suggests a new savings smartcard might be beneficial to make saving a 'crime of opportunity'.

The report, Savings on a shoestring: a whole new approach to savings policy, outlines how policy can build the financial resilience of people who find it hard to save.

The analysis finds that the traditional approach to savings policy - trying to turn people into habitual savers - only works for the proportion of people who are inclined to save anyway.

According to the research, it's the very people least likely to respond to these incentives who are most vulnerable to financial shocks like redundancy and unemployment, so a creative new approach is needed that turns their spending impulses into savings opportunities.

A 'no lose lottery' would work by guaranteeing people a 50p return on their £1 ticket, which would automatically form part of their savings, with the remaining 50p going towards a prize fund.

Unlike other savings lotteries like premium bonds, a no lose lottery would feature a live draw and winning numbers so people would get the anticipation and excitement of the national lottery.

A savings smartcard would be an adaptation of the Oyster card and would allow people to pay small amounts of money into a savings account but not withdraw it.

People could quickly and easily divert money from bill round-ups or multibuy purchases into savings at the check-out counter at the supermarket or other shops.

"As households are still dealing with the aftershock of the financial crisis we desperately need creativity from policy makers, banks and businesses to help people who don't much like to save to acquire assets," said Jeff Masters, Co-author of the report.

"Given the scale of the challenge, a radical rethink of savings policy is needed."

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