Up to 3.5 million people will be eligible for a government-backed bonus on their savings as part of a drive to improve the life chances of the disadvantaged – Prime Minister David Cameron announces today.
In January, as part of his all-out assault on poverty, the Prime Minister set out the government’s plan to transform life chances across the country. This includes the creation of a new savings scheme for people on low incomes – with research showing that almost half of UK adults have less than £500 set aside for emergencies.
The Prime Minister delivers on this commitment today with a new Help to Save scheme, in which anyone in work and in receipt of Universal Credit or Working Tax Credits will be able to save up to £50 a month and receive a 50% bonus after 2 years – worth up to £600.
Account holders can then choose to continue saving under the scheme for a further 2 years and receive another £600 bonus.
This will see them earn a savings pot worth up to £3,600 after the full 4 years of the scheme – with £1,200 coming from the government.
Prime Minister David Cameron said:
“I’ve made it the mission of this government to transform life chances across the country.
“That means giving hard-working people the extra support they need to fulfil their potential.
“And that’s what these new measures will achieve – helping someone start a savings fund to get them through difficult times, giving people on low incomes a pay rise and making sure teenagers have the experience and networks to succeed.”
Chancellor George Osborne said:
“This government is determined to improve the life chances of the poorest in our society and our new Help to Save scheme will mean millions of low income savers across the country could now receive a government bonus of up to £1,200 to help them build up their savings.
“Alongside our new National Living Wage, we’re also boosting pay for young workers with increases in the National Minimum Wage – the next step for the next generation as we move to a higher wage society.”
In his speech in January the Prime Minister also set out plans for a new national mentoring campaign to provide vital guidance to struggling teens.
Delivering on this commitment David Cameron announced that the government will provide £12 million over the course of this Parliament for a new investment fund to build capacity in the system. The fund will be managed by The Careers & Enterprise Company.
Once established, 25,000 young people a year who are at risk of under achieving or dropping out from education will receive extra support from high-flying professionals.
The money will be used to scale up proven mentoring programmes to reduce disengagement among young people in the years before they sit their GCSEs. It will prioritise young people stuck in ‘cold spots’ across the country who do not currently have access to mentors.
The Careers & Enterprise Company will work to encourage business people and professionals to volunteer to act as mentors to provide crucial support and guidance to help young people fulfil their potential. Their work will be backed by a £2 million advertising campaign.
Education Secretary Nicky Morgan said:
“Every child, regardless of their circumstances, should be able to fulfil their potential. We have already made huge strides to improve the life chances of the next generation with raised expectations and higher standards in our schools.
“However the unacceptable fact remains there are some children around the country at risk of being left behind.
“An inspirational mentor can be instrumental in helping someone develop the character and motivation to go on and succeed in whatever life path they choose. This funding will make a real difference to the lives of our young people.”
Mike Hughes, Executive Director of charity TwentyTwenty, which supports disadvantaged, disengaged or hard to reach young people, said:
“For many disengaged young people, a volunteer mentor is the first and only beneficial adult role model they have consistent access to over a long period of time.
“As such, the mentoring relationship can be literally life changing, empowering them to overcome many personal challenges and achieve positive goals against the greatest of odds.
“At TwentyTwenty we’ve seen this happen hundreds of times over the years so we wholeheartedly welcome the Prime Minister’s innovative and important campaign to give this vital opportunity to thousands more young people who desperately need it.”
Sir Dan Moynihan, CEO of the Harris Federation, said:
“In schools like ours, where social mobility is everything, the encouragement and outside perspective of a good mentor can make a huge difference to a young person’s life. We have had hundreds of successful and inspirational adults volunteering to mentor our students and I welcome this scheme, which will open up mentoring to many more deserving young people.”
Increase to the National Minimum Wage
Continuing the government’s commitment to help working people, the Prime Minister announced that almost half a million young people will benefit from an increase to the National Minimum Wage.
The government has already announced plans for a National Living Wage of £7.20 for workers over 25 which will be introduced from April – equivalent to a pay rise of at least £900 a year.
Today the Prime Minister announced that 21- to 24-year-olds on the minimum wage would also see a pay rise worth an average of £450 per year:
- The National Minimum Wage for 21- to 24-year-olds will rise by 3.7% to £6.95 an hour
- 18- to 20-year-olds will see their minimum wage rise by 4.7% to £5.55 an hour
- The minimum wage for 16- to 17-year-olds will rise by 3.4% to £4.00 an hour
- Apprentices will see their wage rise by 3% to £3.40 an hour
The rise will take effect in October 2016, and the government has accepted in full the independent Low Pay Commission’s recommendations for this year. This increase will mean that for the first time the National Minimum Wage rate for 21- to 24-year-olds is restored to its highest level in real terms, higher than its previous peak before the financial crisis.
The number of people in work in the UK is currently the highest it’s ever been and youth unemployment is at its lowest for a decade, while wages continue to rise above inflation. Based on recent strong employment and wage growth figures, the Low Pay Commission has said this rise is manageable for employers.
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