Overview

The Saving Gateway Accounts Act 2009 established a program to encourage saving among low-income individuals in the UK. It created a specific type of savings account ("Saving Gateway account") with government incentives and tax benefits for eligible individuals.

Description

This Act creates a system of Saving Gateway accounts designed for eligible individuals receiving certain benefits or tax credits. Eligibility is determined by HM Revenue and Customs (HMRC). Eligible individuals are sent a notice of eligibility with an expiry date, within which they must apply to open an account with an "approved account provider," approved by the Commissioners of HMRC.

Account Requirements:

Accounts must meet specific requirements: a minimum 12-month maturity period, a guaranteed maturity payment calculated based on the highest balance reached during that period (a bonus payment), and a death payment provision for holders who die before the maturity period. Regulations set limits on monthly contributions and other account rules.

Payments and Tax:

Maturity payments are calculated by multiplying the number of whole pounds in the highest account balance by a government-specified multiplier (in pence). The Act allows for regulations to provide tax relief on these payments. HMRC manages the scheme, including the recovery of any overpayments and handling of returns.

Penalties and Appeals:

Penalties are established for incorrect information, non-compliance, and failures to meet reporting requirements. Appeals against the Commissioner’s decisions are possible through established tribunal processes.

Information and Reviews:

The Act requires various information disclosures to HMRC. An independent review of the scheme's impact is mandated, with results presented to Parliament.

Government Spending

The Act does not specify a fixed amount of government spending but implies significant expenditure through maturity payments, administrative costs, and potential tax relief. Exact figures are determined by the regulations set under the Act and the participation level.

Groups Affected

• Low-income individuals: Eligible for the Saving Gateway accounts and potential benefits; positive impact anticipated.
• Financial institutions: Can become approved account providers, subject to HMRC approval and regulations; potential for new business but also added compliance burdens.
• HMRC: Responsible for administering the scheme, including eligibility assessments, monitoring, and penalty enforcement; significant administrative cost.
• Parliament: Receives a review report after 7 years assessing the effectiveness of the Saving Gateway Accounts.

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