Make this a savers Budget
Tax Incentivised Savings Association – is urging the Chancellor to take the first steps towards creating a National Saving Strategy in next week’s Budget.
Government incentivised savings schemes already exist but some work better than others. TISA says that few dovetail sufficiently to create a meaningful platform for private individuals saving for life.
Tony Vine-Lott, TISA Director General says:
“The reality of the credit crunch is hitting home and more and more people are recognising the importance of saving or paying off debt. The Chancellor has the ideal opportunity to build on this momentum and encourage people to save for their long term financial security.
“But in order to achieve this we need a holistic savings framework that encourages regular saving and can reflect the different financial needs of an individual throughout their life.”
Individual Savings Accounts (ISAs) is an excellent example of a modern day savings vehicle, TISA points out. ISAs have the flexibility for short term saving to meet emergency expenditure as well as encouraging financial provision for old age by allowing a pool of investment funds to be built up within a tax free wrapper.
TISA is recommending the immediate implementation of five straightforward improvements:
1. Introduce workplace ISAs to allow employer contributions
2. Permit the transfer of ISA holdings between husband and wife/civil partners without leaving the ISA wrapper on death of a partner
3. Decide now that on maturity a Child Trust Fund will be automatically transferred into an ISA
4. Agree to the direct transfer of 25% tax free pension drawdown into an ISA, outside of the individual’s annual subscription limit
5. Convert the new Saving Gateway account into an ISA after the two year contribution period.
“Taking these steps would be far more beneficial than merely raising the ISA annual allowance” comments Tony Vine-Lott, “They would make people think very carefully about the importance of committing to savings on a life long basis. Similarly I would like to see a commitment from the Chancellor to make ISAs the savings mainstay of the future.”
Ends
For further information, please contact: Tony Vine-Lott, Director General, TISA – Tel: 01372 374728, Mobile: 07790 006108. Email: tony.vine-lott@tisa.uk.com
Issued on behalf of TISA by Cauldron Consulting, contact Steve Radford – Tel: 020 3178 7238, Mobile: 07889 903786. Email: steve.radford@cauldron-consulting.com
Notes for Editors
The Tax Incentivised Savings Association (TISA)
TISA is the premier trade association in the UK retail savings and investment industry. By engaging with member firms, government, political parties, regulators and consumer groups TISA’s ultimate goal is always to further consumers’ best interests. It seeks to improve the range, features and quality of savings and investment schemes available whilst at the same time encouraging more people to save for their financial security and peace of mind.
Uniquely, TISA is able to articulate the opinions of the whole savings and investments marketplace through its membership comprising over 120 member firms involved in the supply or distribution of products to the sector and its consumer interest. TISA’s remit extends across the broad spectrum of government sponsored savings and investment vehicles including:
• Individual Savings Accounts (ISAs)
• Child Trust Funds (CTFs)
• Savings Gateway
• Personal Pensions
• Investment Bonds
• Employer based pension schemes
• Wraps and platforms
• Other consumer-centric savings schemes and initiatives.
HM Government uses TISA’s market knowledge and ability to represent the views of both the savings and investments industry and consumers to help it to its policy in this area. Recent TISA successes include improvements to the ISA, the regime in which ISAs operate and simplification of the CTF.