Government should support the creation of new financial services products to better incentivise saving

The Government must develop a financial citizenship approach to long term saving argues the International Longevity Centre – UK (ILC-UK). A new think-piece, ‘Financial Citizenship: Rethinking the state’s role in enabling individuals to save’ supported by the Friends Provident Foundation, argues that the Government’s approach to long term savings has focused on responsibilities, but not rights.

The ILC-UK argue that the UK has a chronic under-saving problem, one which has been exacerbated by the financial crisis and economic downturn. The Think Tank states that there is an urgent need for policy-makers to address this problem.

Baroness Sally Greengross, Chief Executive of ILC-UK said
“We have a long term savings crisis in the UK. Far too few of us are saving enough for our long term needs. There is an important role for Government, the private sector and individuals.
We should move towards ‘matching’ contributions from the government, in place of tax relief, not least because incentives of this form are easier to target. Alongside this, the government could enable accounts allowing more liquid forms of long term saving for young people only, to help nurture a savings habit while recognising the particular circumstances of this life-stage.“

Dr Craig Berry, co-author of the report said
“At a basic level, citizenship implies that, in return for recognising our duties such as obeying the law and paying taxes, we have certain entitlements. We need a new approach to long term saving, one which takes on the principles of citizenship. A ‘financial citizenship’ framework would outline the respective responsibilities of individuals and the state regarding saving. While the current set of Government policies in place are not necessarily inconsistent with financial citizenship, nor are they adequate to support the vital need for more long term saving.”

Andrew Thompson, Grants Manager at the Friends Provident Foundation added
“The Foundation believes that building some savings can be a way of helping combat poverty and developing future personal autonomy - particularly for low-income groups - but is aware that UK society as a whole has moved away from savings as a source of wealth.
Our Trustees were therefore pleased to be able to support ILC-UK to conduct an exploration of what rights and responsibilities should exist in our ‘financialised’ society and the potential roles of the individual, the state and the private sector in moving us in a new direction on saving. We welcome the publication of their report, which raises some very important real-life issues, suggests some interesting solutions, and sets out what the implications for public policy would be. We very much look forward to following the debate that we hope will ensue.”

In the report, ILC-UK set out a series of principles of financial citizenship:

  • Duties must be matched by entitlements, which are not contingent upon private sector provision.
  • The financial system must be ‘democratised’.
  • Policies designed to support citizens to engage with the financial system should involve both universal and progressive (or means-tested) support.
  • Universal support should be designed in accordance with the life-stage implications for recipients.
  • Policies based on insights from behavioural economics are consistent with financial citizenship.
  • Financial citizens have a right to financial education.

ILC-UK urge the Government to consider supporting the creation of The Lifetime Bonus Savings Account (LBSA) developed by Tony Dolphin. Dolphin argues that the LBSA, in offering matching contributions for consistent saving targeted on low-to-middle income earners, represents a use of public money far more consistent with financial citizenship than existing spending to encourage saving.


About ILC-UK: The International Longevity Centre-UK is the leading think tank on longevity and demographic change. It is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change. We develop ideas, undertake research and create a forum for debate.


  • 'Financial Citizenship: Rethinking the state’s role in enabling individuals to save’ has been supported by the Friends Provident Foundation
  • The think piece will be launched at an event chaired by Baroness Greengross on the afternoon of 24th April. Speakers at the event include:- Danielle Walker Palmour, Friends Provident Foundation and David Budworth of The Times
  • Advance copies of the report are available from David Sinclair at ILC-UK.


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