Contract saving schemes

Contractual saving schemes for housing are institutionalised savings programmes normally linked to rights to loans for home purchase. They are diverse types as they have been developed differently in each national context, but normally fall into categories of open, closed, compulsory, and ‘free savings’ schemes. The purpose is to help households build up the financial capacity necessary for home purchase. They typically guarantee a housing loan after a specified period of saving, or link a required savings scheme with home purchase. This article explores the design and implementation of such schemes in different societies and considers various rationales for their implementation and regulation. The analysis identifies various advantages and risks associated with linking savings to housing markets.