- `Help to Save' plan will help lower earners set money aside
- Prime Minister to announce increase for under 24s' minimum pay
U.K. Prime Minister David Cameron will announce a new savings package to help lower earners set money aside along with an increase in the minimum wage paid to younger workers.
The ‘Help to Save’ program will give those working and receiving so-called universal credits or working tax credits a 50 percent bonus on their savings, if they set aside up to 50 pounds a month for two years, Cameron’s office said in a statement on Monday. The bonus, worth up to 600 pounds ($863), will be available to 3.5 million people. Help to Save accounts will be available no later than April 2018.
The measures mean "giving hard-working people the extra support they need to fulfill their potential," Cameron said. The package will be “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.”
Cameron and Chancellor of the Exchequer George Osborne are seeking to stave off criticism that their Conservative party privileges only the richest ahead of a budget on Wednesday that’s already been accused of sparing wealthier voters. Osborne has already warned more austerity will be necessary as the economic outlook has deteriorated.
After the first bonus is paid out, savers can choose to continue to put money aside and receive another bonus after two more years, making the total government contribution worth up to 1,200 pounds. The government also announced it will invest 14 million pounds in a national mentoring campaign to help struggling teenagers.
Following a pledge by Cameron earlier this year to support younger lower-paid workers, those aged 21 to 24 earning the minimum wage will see their pay rise an average of 450 pounds per year from October. The hourly rate will increasing 3.7 percent to 6.95 pounds an hour, according to the statement. Those aged 18 to 20 will see their pay climb by 4.7 percent to 5.55 pounds an hour.
Osborne already announced in his summer budget a national living wage of 7.20 pounds an hour for workers over 25 from April.