Simplification is the key - Centre for Policy Studies

The UK savings industry is barely trusted and excessively complicated, in part due to
the different tax treatment of ISAs and pensions. This matters. We are saving far too
little, particularly given the decline in occupational pensions. Fewer savings mean
lower growth and more pensioner poverty. But it need not be like this.
This report makes radical recommendations to encourage the growth of a savings
culture by bringing ISAs and pensions closer together. An annual contribution limit of
£45,000 is proposed for all tax-incentivised saving, along with limited pre-retirement
access to pension savings. Auto-enrolment should be extended to include ISAs.
Pension assets should be able to be bequeathed free of inheritance tax.
The proposals meet people’s desire for more savings fl exibility, address gender
inequality, restore some intergenerational fairness and could provide the Treasury
with an opportunity to make substantial savings in tax relief.
Price £15.00
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