A new national savings scheme for poor people will be launched across the UK from 2010, Chancellor Alistair Darling has announced in the Budget.
The collapse of Farepak highlighted savings issues among the poor
The Saving Gateway will see every pound saved by people on low incomes topped up with an unspecified contribution from the government.
Up to eight million people on benefits and tax credits could be eligible to open the two-year savings account.
Charities and savers groups have welcomed the proposal.
Years in the planning
The scheme was first proposed in 2001 as an incentive to save for those on lower incomes.
It led to pilot schemes in Cambridge, Cumbria, East London, Manchester, East Yorkshire and South Yorkshire, where up to 80% of participants ended up saving regularly - well above the national average.
Some 22,000 people took part in the pilot programmes, saving a total of £15m.
Many pointed to the financial incentive as the reason for saving. Top-up funding ranged from 20p to £1 for every £1 saved in the various pilot schemes.
"I thought the idea of getting that sort of return on that sort of money was a fair deal. You are not going to get that on the stock exchange are you," said one saver in Hull.
Who will be eligible?
The first accounts under the national scheme - run by banks and building societies - will be introduced from 2010.
People entitled to sign up will be those receiving working tax credits, child tax credits paid at the maximum rate, income support, jobseeker's allowance, incapacity benefit, employment and support allowance and severe disablement allowance.
The government only makes its contribution when the account matures after two years.
It will only pay a top-up for months when no withdrawal was made, hoping to kick-start savings habits among the poor.
One saver in the pilot scheme said: "This is the one saving that we've got and we want to make sure we see it through right to the end."
The Treasury has not said how much the government's contribution will be for every pound saved, but a £25 monthly limit was likely.
Lessons from Farepak
In November 2006, a think-tank - the Institute of Public Policy Research - called for a top-up scheme for the low paid, as most savings incentives were for the well-off.
The chancellor announced a nationwide scheme from 2010
This call was repeated by the Commons Treasury Select Committee in October 2007. MPs said the importance of saving by the low paid was highlighted by the collapse of the unregulated Farepak Christmas hamper saving scheme.
Charities, such as Citizens Advice, have welcomed the chancellor's announcement of a regulated national scheme.
The Association of British Credit Unions (Abcul) said research in 2005-6 showed 28% of households had no savings, rising to 43% of households earning less than £300 a week.
"To help people become more confident in managing their finances, and to reduce reliance on credit, it is vital that those on low incomes are able to save and build up their personal assets," said Mark Lyonette, chief executive of Abcul.
The government has launched a consultation on its plans.