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Commission seeks help for savers

01 November 2013

PA

Goal! Newcastle United's Mathieu Debuchy celebrates on Sunday

Goal! Newcastle United's Mathieu Debuchy celebrates on Sunday

TRADES in UK investments valued at more than £10,000 should be subject to a flat-rate £1 levy to fund a new body representing the interests of savers, a report by a poverty commission chaired by the Bishop of Birmingham, the Rt Revd David Urquhart, suggests.

The Birmingham Policy Commission was established by the University of Birmingham to explore wealth inequality. Its report, Sharing our Good Fortune: Understanding and responding to wealth inequality, published last week, calls for a number of measures to encourage savings, even among those on the lowest incomes.

In addition to the not-for-profit organisation representing the interest of savers, the Commission calls for the automatic opening of a savings account for people starting a new job; a match-saving scheme to reward savings by those on low incomes; fresh incentives to increase the amount saved in occupational pensions for those on low and middle incomes; and increased funding for debt advice and credit unions.

"Saving is clearly difficult for those on very low incomes," the report says, "but if people can afford to repay a loan, this suggests that they could afford to save."

The UK debt problem was "spiralling out of control", Bishop Urquhart said. "Payday lenders are preying on some of the most vulnerable in society. The less well-off used to save hard for things they wanted, but today's society puts everything on credit, and serious problems occur when those loans have to be repaid. We need to persuade more people to save, even if it's very small amounts."

The City Save credit union in Birmingham sets up a savings plan alongside loan repayments for all its clients. Its chief executive, Angela Clements, said: "A lot of people feel they can't save, and are shocked themselves when they do manage it. . . . People are often amazed when they've saved £100 or £200 for the first time in their lives. In our experience, people do want to save if you can make it easy for them."

Wonga dilemma for bishop. The Assistant Bishop of Newcastle, the Rt Revd Frank White, has spoken of his "confused loyalties" after his favourite football team agreed a shirt- sponsorship deal with the payday-loan company Wonga.

"The black-and-white-striped shirt of Newcastle United [is] a picture to which has been attached ambitions and hopes for our region for many years," the Bishop said. "The Magpies' shirt is a source of pride, and something that is instantly identifiable.

"How difficult it is to look at it this season, carrying, as it does, the logo of Wonga, one of the most active of the payday-loan companies. How dangerous is the effect of repeated debt on the well-being of families and communities. How confused are my loyalties now whenever I watch my favourite football team."

Writing in the diocesan newspaper, Link, he described the sponsorship deal as "a great sadness and embarrassment", and said that the Magpies' iconic strip will be "reinforcing what many of us believe to be a message that undermines rather than enriches our society".

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