The new Government special savings incentive scheme which came into operation on 1 May 2001 allows savers to save between £10 and £200 a month amounting to between £200 and £12,000 over a five year period. Under the scheme the Government guarantees the saver £1 for every £4 saved. Savers must be over 18, resident in this country and have a PPS number.
All social assistance payments are subject to a means test. The purpose of the means test is to ensure that limited resources are directed towards those with little, if any, additional income. For the purposes of assessing means, any savings which a person might have are treated as capital and are assessed along with the value of property and any cash income.
Under the current arrangements for assessing capital for all social assistance schemes except supplementary welfare allowance: the first £10,000 is disregarded; capital between £10,000 and £20,000 is assessed on the basis of £1 weekly means for each £1,000 of capital; capital between £20,000 and £30,000 is assessed on the basis of £2 weekly means for each £1,000 of capital; and capital above £30,000 is assessed on the basis of £4 weekly means for each £1,000 of capital.