Think tank urges savings reform
A report by the Centre for Policy Studies think-tank has said the UK’s savings system needs to be reformed in order to encourage people to bank their money.
According to the think tank, schemes need to be simplified if people are going to save as the current system is too complex with multiple tax regimes.
The Centre for Policy Studies is suggesting pensions and Individual Savings Accounts (ISAs) should be combined, with an overall contribution limit of £45,000.
The Centre also believes under-16s should be encouraged to save their cash and suggests introducing a new mini-ISA with an annual limit of £1,200.
Many argue that with people living longer and the state finding it difficult to fund pensions, people should be saving more during their working life, in order to fund their retirement.
The Association of British Insurers (ABI) agrees with the Centre’s report and according to Maggie Craig, ABI’s director of life and savings: “The UK urgently needs to build a better savings culture.”