Should lower-income families pass through the Gateway to Saving?

The Government has stated a desire to ‘increase rates of saving and asset ownership among lower-income households’. But does economic reasoning suggest that there are grounds to be concerned about the saving behaviour of lower-income households? I will argue that although there might be some people towards the bottom of the income distribution who could benefit from being encouraged to save more, there is a danger that if the Government’s proposed policy is not carefully targeted then it might not achieve its aims. To set the debate in context, let us begin by considering evidence on the saving behaviour of lower-income households.