First Home Saver Accounts: too complex and no fun?

Rules for First Home Saver Accounts are still being developed but it is worthwhile looking at some research done in USA about encouraging savings in difficult times by low- and moderate-income families.

In "Using Financial Innovation to Support Savers: From Coercion to Excitement," [PDF] Harvard Business School professor  Peter Tufano attempts to explore the various reasons why people don’t save and reviews a wide variety of programs that support savings by families.

These programs range from ones that literally compel families to save, to those that make it hard not to save, make it easier to save, provide financial incentives to induce savings, leverage social networks to support savers, and finally, to programs that excite people to saving. He describes examples of each program and provide some information on their economics and effectiveness.

In order to support people who want to
save (not to force someone to save who doesn’t want to) he concludes that the most interesting ideas try to make savings a fun or satisfying experience.

Interview with Tufano

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