Savings are an important part of financial inclusion. Even a small amount of savings increases financial security, enables people to meet unexpected costs and can open up opportunities.

Saving

Planning ahead financially is a key component of financial capability. Saving for the future can be for many different purposes from short-term savings (eg: for Christmas or a birthday) to long-term savings (eg: pensions or for education), as well as simply 'saving for a rainy day'.

Promoting saving

Much financial capability work includes elements around promoting savings. Click here for our pages on financial capability and click here for some great resources for workshops.

There are also some initiatives that focus specifically on promoting savings and/or explaining different ways of savings:

Save Xmas - this OFT-led campaign aims to educate people about the advantages and disadvantages of different types of savings products for short-term savings, focusing on savings for Christmas.

The Child Trust Fund - is available to every child in Britain with an initial payment made by government. Click here for more information.

Credit Unions promote savings through their accounts which are often tailored to people saving small amounts. Click here for more information from ABCUL.

Research & information on saving

Short changed from New Philanthropy Capital provides a good overview of savings and financial inclusion in Chapter 6. Click here to access the report (2008)

BMRB research into use of financial services by those on the margins of banking provides some evidence on the types of informal savings mechanisms financially excluded people may use. Click here for the report (2006).

The Pomeroy review after the collapse of the Farepak hamper scheme investigated how and why a predominantly low income group favoured this form of unregulated saving and looked at their savings behaviours more widely. Click here for the findings from consumer research workshop which informed the review. Click here for the full Pomeroy Review (2007).

Asset building/ Asset based welfare

The benefits of promoting savings are shown in theories of asset-based welfare. Asset-based welfare or asset building looks at ways of encouaging people on low-incomes to build assets (such as savings) as a way of opening opportunities to escape poverty.

The ippr Centre for Asset Building developed research leading to the Child Trust Fund and has background information on asset building.

Asset-building can also mean support for people to start their own businesses or increase their earning potential, which is linked to microfinance initiatives internationally.

The Levi Strauss Foundation support asset building initiatives around the world, which gives an interesting international context to this work. Click here for more information.