Saving Gateway Accounts Bill
4:37 pm
Mark Lyonette: Many of our members would be very keen to offer the account. We may not have some of the same systems costs as banks and building societies in terms of development of banking platforms, but we see the cost of collection as quite significant, in so far as our members would want to encourage take-up, we would try to move away from cash collection and make use of the more cost-efficient ways that we have of collecting money from people on low incomes. We will look to make have payroll deduction agreements with employers of people on low wages. Similarly, for people who are paying their benefit into the credit union, we would look to have deductions from benefit, because even with our cost structure, which obviously is very different from that of Adrian’s and Helen’s members, we cannot look to make this work on cash collection. The cost of collection is not sustainable, in our view.
We also think that the mechanisms for deducting from people’s wages and benefits have another advantage, which is that they are incredibly convenient. One of the things that the credit unions have learned over the years is that savings are not just about return. Convenience also encourages saving. It is also about—this is particularly important in current times—perception of safety. To get people to part with their savings, you need those three things. Convenience is key, not just the 50p match, so we will look to partner more with larger employers—in fact, with all ranges of employers. We want to see if we can collect savings in a way that is very easy for people—like falling off a log, is how we like to describe it—and to make it as cheap as possible for the providers and credit unions.