Insurance and investment savings banks and assetbased welfare

Insurance and investment: savings banks and asset-based welfare ‘Possessing is deemed to represent responsible citizenship’ Josephine Maltby Sheffield University Management School

Today’s 25 -year-olds need to save the equivalent of £ 800 a month over the next 40 years to retire at 65 with an income of £ 30, 000 a year, according to Rebecca Taylor, director at the Chartered Institute for Securities and Investment (Financial Times 12 February 2016

Asset-based welfare ‘Emphasises the importance of individuals acquiring and accumulating assets of various sorts as a way of promoting economic and social development’ (Gamble and Prabhakar 2005) and claimed to create ‘greater long-term thinking and planning for the future, increased participation in the community and investments in self, financial instruments and enterprise for greater returns’ (Sherraden 2003)

Asset-based welfare programmes 1 • Individual Development Accounts matching individual savings with additional money from the sponsor (government, private or NGO) • The Child Trust Fund setting up a savings plan with a £ 250 deposit • Savings Gateway would add 50 p to every £ 1 saved by people on low incomes, after the account had been open for two years.

Asset-based welfare programmes 2 • personal health budgets allow users to commission their own package of care and treatment • Proposed personal maternity care budgets • Medical Savings Accounts • Help to Buy Scheme

Common features They are aimed at individuals: they offer a financial product with some Government involvement, and they restrict its use. This may be via a time limit (the Savings Gateway required the account to be maintained for 2 years), defined purposes (funds to be spent only on specific products/services from approved providers) and/or limits on the amounts to be spent or invested

Savings Banks Response to early 19 th c concerns about unemployment, poverty Rapid spread (1814 start, 479 banks by 1829, 661 by 1859) Process of concentration, survival of urban banks into TSB network Trustees = local dignitaries, squires, industrialists SB reporting demonstrated their use by working classes Offered exclusively savings accounts, invested in Consols (unlike banks in Western Europe) Claimed to • promote self-discipline and incentive needed to stop the poor wasting money on drink etc • divert the working class from self-managed institutions which were insecure and promoted links with TU activity • cut the cost of parish maintenance • ensure social order, e. g. linkage of vote to £ 60 savings balance ( a stake in the country) in the 1859 Representation of the People Bill

Edinburgh Savings Bank annual report 1841 Analysis of savers by gender, occupation, number and total/average balances Regular feature of reports till late 19 th century

Charity Organisation Society 1869 An advocate of the COS (Anon, 1871) described it as: Your almsbroker: Like as ye consult him of the Stock Exchange, touching the best investments to be made in stocks and shares, even consult the committee of thy district as to where, when and how to give thy bounties. They will find ye safe and profitable investments and openings. Duties of a COS worker: conditions of support

‘Concern for the poor and the voiceless, upholding moral over material values, connecting the rural with the urban, the preservation of nature and the commons, activism, patriotism — these were constant in Octavia Hill’s work’. The Enduring Relevance of Octavia Hill (Demos 2012)

Common features Prescriptive – saving not borrowing Suspicion of organisations run by the poor Moralising management style Short-term monitoring, personalised Financial emphasis in bookkeeping and reporting styles • Hostility to state intervention • • •

and common defects? • ‘Assuming that there is a single savings regime which will deliver well for everyone, and this is not true’ • Choosing the wrong asset? • Creating vulnerable customers? ‘A philosophical shift in emphasis from collective to individual responsibility’