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In the wake of the global financial crisis, public debate has been dominated by the implications of the uncertain economic climate we are living in.

The implications for saving by individuals and families have received less attention. While this is understandable to some extent, it cannot be denied that the UK has a chronic under-saving problem, which has been exacerbated by the financial crisis and economic downturn.

A high proportion of UK households have little or no saving or investment wealth, and these households are concentrated among those with the lowest incomes. The under-saving problem is compounded by indebtedness, especially for young people, and particularly acute in relation to saving for retirement. Relatively few households are setting aside sufficient funds for retirement.

There is an urgent need for policy-makers to address this problem. This paper, supported by Friends Provident Foundation, argues that this requires us to rethink the foundations upon which savings policy has been based.

In short what is required is a ‘financial citizenship’ framework, outlining the respective responsibilities of individuals and the state regarding saving. Clearly, the scope of financial citizenship extends beyond enabling individuals to save. Developing a citizenship framework on financial issues can, however, help us to plot a new approach to public policy on saving; equally, considering issues around financial rights and responsibilities with reference to a specific, real-world policy dilemma can help us to test the value and validity of the notion of financial citizenship.

The paper begins by outlining recent public policy objectives related to financial inclusion and enabling saving. The second section accounts for the emergence of financial citizenship in the context of wider changes within our understanding of citizenship. The third section assesses in more detail what kind of rights and responsibilities exist in a financialised society, before outlining a new understanding of what citizenship could mean in this context. The final section suggests what kind of framework and policy ideas that financial citizenship gives rise to, in relation to policy on saving.

Authors: Craig Berry and Valentina Serra

A copy of the think-piece is available for download below.

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